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ED Raids Multiple Premises in Money Laundering Case Against GKV Group, MIAL

Image for Representation
(Reuters)

Image for Representation (Reuters)

They said the raids are being carried out at nine premises in Mumbai and Hyderabad under the provision of the Prevention of Money Laundering Act (PMLA).

The Enforcement Directorate (ED) on Tuesday raided multiple locations in connection with a money laundering case against GVK group, Mumbai International Airport Limited (MIAL) and others to probe alleged irregularities to the tune of Rs 705 crore in running the Mumbai airport, officials said.

The raids were carried out at nine locations in Mumbai and Hyderabad under a provision of the Prevention of Money Laundering Act (PMLA) to collect evidence, they said.

Offices of GVK group, MIAL and the premises of GVK group promoters were raided, the officials said.

The central probe agency had filed an enforcement case information report (equivalent of a police FIR) earlier this month under the PMLA after studying a recent Central Bureau of Investigation (CBI) First Investigation Report (FIR) filed against the same entities.

The ED is probing if genuine funds were laundered to amass personal assets by the accused by illegally routing funds.

The ED and the CBI cases pertain to the alleged siphoning off Rs 705 crore from the funds of the MIAL, a joint venture under public-private partnership (PPP) between the GVK Airport Holdings Limited and the Airports Authority of India (AAI), besides other investors, by showing inflated expenditure, under-reporting of revenues, fudging of records, among others.

The CBI had booked Gunupati, a director in MIAL, his son GV Sanjay Reddy, managing director at MIAL, the companies MIAL, GVK Airport Holdings Limited (a GVK group company) and nine other private companies that were allegedly used to camouflage inflated figures through sham deals and unidentified AAI officials.

The AAI entered into an agreement with MIAL on April 4, 2006, for the modernisation, upkeep, operation and maintenance of the Mumbai airport.

It is alleged that the promoters of the GVK group in MIAL, in connivance with their executives and unidentified AAI officials, resorted to siphoning off funds in multiple ways, the CBI had said.

The CBI had also carried out raids in Mumbai and Hyderabad after filing its FIR.

It had alleged that the accused siphoned off funds showing execution of bogus work contracts to nine companies in 2017-18, causing a loss of Rs 310 crore.

The promoters of the GVK group allegedly misused the reserve funds of MIAL to the tune of Rs 395 crore to finance their group companies, the CBI alleged.

The agency also alleged that the group inflated the expenditure figures of MIAL by showing payments to employees at their headquarters and group companies, who were not involved in the running of MIAL, causing a revenue loss to AAI.

The promoters allegedly under-reported the revenue earnings of MIAL by entering into contracts with related parties and meeting their personal and family expenses using MIAL funds, it said.

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