ED Attaches ₹18.33 Crore Properties Across Andhra Pradesh, Telangana in Rice Mill Bank Fraud Case.
(Judicial Quest News Network)
Visakhapatnam: Intensifying its investigation into an alleged bank fraud involving Kallam Modern Rice Mills Pvt. Ltd. and associated entities, the Directorate of Enforcement (ED), Visakhapatnam Sub-Zonal Office, has provisionally attached immovable properties worth ₹18.33 crore belonging to Kallam Peri Reddy, his family members and associates under the provisions of the Prevention of Money Laundering Act, 2002 (PMLA).
The attachment comprises 50 immovable properties valued at ₹16.88 crore and five flats valued at ₹1.45 crore, situated across Andhra Pradesh and Telangana.
The properties have been identified by the agency as alleged proceeds of crime under the PMLA or as properties representing equivalent value thereof.
The ED initiated its money-laundering investigation on the basis of an FIR registered by the Central Bureau of Investigation (CBI), Economic Offences Wing (EOW), Chennai, following a complaint lodged by the State Bank of India (SBI), formerly State Bank of Hyderabad, Guntur.
The case pertains to alleged fraudulent procurement of credit facilities amounting to ₹24.57 crore during the period 2010–2013 from the erstwhile State Bank of Hyderabad, Arundelpet Branch, Guntur.
According to the investigation, the borrower entities allegedly secured the credit facilities by submitting fake and forged title deeds relating to collateral properties and subsequently diverted the loan proceeds, thereby causing a wrongful loss of ₹18.33 crore to the bank.
The borrower entities named in the investigation include M/s. Kallam Modern Rice Mills Pvt. Ltd., M/s. Sri Ramabrahma Modern Rice Mills Pvt. Ltd. and M/s. Sri Vinayaka Traders, along with other associated persons and entities.
26 Entities Allegedly Operated Through Relatives, Employees and Associates
During the course of its investigation, the ED reportedly established that Kallam Peri Reddy was operating and managing approximately 26 entities registered in the names of his relatives, employees and associates.
These entities allegedly functioned as part of a network through which financial transactions were routed, including the three principal borrower concerns under investigation.
A detailed examination of banking transactions reportedly revealed that approximately ₹23.81 crore was withdrawn in cash from the cash-credit accounts of the three borrower entities. The withdrawals were allegedly made in the names of workers, accountants and Kallam Peri Reddy himself.
The agency’s investigation further indicated that substantial portions of the loan proceeds were allegedly diverted and utilised for acquiring immovable properties.
According to the ED, some of these acquisitions were funded through cash withdrawn from bank accounts controlled by Kallam Peri Reddy.
Properties Allegedly Transferred to Relatives Without Consideration
A further significant aspect emerging from the investigation concerns the alleged transfer of immovable properties to relatives and associates without receipt of any sale consideration.
The ED reportedly found that although certain properties were registered in the names of relatives and associates, they were allegedly held only as nominal or benami owners, while Kallam Peri Reddy continued to exercise actual beneficial ownership and control over the assets.
The agency has treated these transactions as part of the alleged process of concealing and projecting properties derived from the proceeds of the bank fraud, warranting action under the anti-money laundering framework.
₹18.33 Crore Assets Attached Under PMLA
Acting upon the findings of its investigation, the ED has provisionally attached 50 immovable properties valued at ₹16.88 crore and five flats valued at ₹1.45 crore, aggregating to ₹18.33 crore.
The attachment has been affected under the provisions of the Prevention of Money Laundering Act, 2002, on the grounds that the identified assets constitute alleged proceeds of crime or represent equivalent value thereof.
The action marks a significant development in the agency’s efforts to trace and secure assets allegedly acquired through the diversion of public-sector bank funds and transactions designed to conceal their beneficial ownership.
Further investigation is underway to identify the complete trail of the allegedly diverted loan proceeds, establish the financial links among the entities and individuals concerned, and ascertain the extent of assets allegedly acquired through the proceeds of the suspected banking fraud.
