PMLA court issues process against GVK Airport Developers, MIAL, Sanjay Reddy

The order against GVK Airport Developers Ltd., Mumbai International Airport Limited (MIAL) and its managing director GV Sanjay Reddy and 18 others comes on the basis of a complaint by the Enforcement Directorate (ED).

A special PMLA (Prevention of Money Laundering Act) court has issued process against representatives of GVK Airport Developers Ltd., Mumbai International Airport Limited (MIAL) and its managing director GV Sanjay Reddy and 18 others on the basis of a complaint by the Enforcement Directorate (ED). The court has asked them to appear before it on September 22.

AAI had entered into an agreement with MIAL in 2006, allowing them to operate, manage and develop Chhatrapati Shivaji Maharaj International Airport (T-2). (HT FILE)

ED has, in May, filed a charge sheet against all the 21 accused.

Special PMLA judge MG Deshpande in a detailed order said, “MIAL had allegedly entered into bogus contract of ₹310 crore during 2017-2018 with nine firms/companies, but against the same, no work was executed.”

Referring to the ED charge sheet, the court said overdraft facility (OD) against surplus funds totalling ₹395 crore were remaining with MIAL after sharing revenue with the Airport Authority of India (AAl) and after deducting expenses kept as fixed deposit receipts (FDR) with public sector undertaking (PSU) banks, MIAL diverted the same to other group of companies.

ED also alleged that MIAL inflated expenditure by paying salary of GVK employees from its revenues, and also rented out premium retail areas in Mumbai airport to family members, relatives and employees of GVK at very low rates, thereby reducing revenues. In this way, ₹705 crore were fraudulently siphoned off from MIAL, resulting loss to AAI and corresponding wrongful gain to GVK Airports Holding Ltd, said the court.

ED had filed the complaint through special prosecutor Kalpana Patil.

AAI, which managed the city airport, had entered into an agreement with MIAL in 2006, allowing them to operate, manage and develop Chhatrapati Shivaji Maharaj International Airport (T-2). Accordingly, MIAL was to share 38.7% earnings with AAI and keep the rest for modernisation and extension of the airport.

ED has already attached land parcel in Tamil Nadu owned by GVK in November, 2020. The said land, valued at ₹509 crore, was purchased from crime proceedings, the agency said.