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Money-laundering probe: ED raids GVK group offices in Hyderabad
The case pertains to the period from 2006 and deals with the diversion of money from Mumbai International Airport Ltd (MIAL), in which GVK Group has a 50.5% stake and the state-owned Airports Authority (AAI) of India 26%, to other companies of the company, causing a loss to AAI and the exchequer.
The Enforcement Directorate (ED) on Tuesday raided offices of Hyderabad-based GVK Group, and its promoters in connection with a money-laundering probe related to alleged irregularities crore in the Mumbai airport’s development and maintenance, two officials said. The Group runs the airport.
The case pertains to the period from 2006 and deals with the diversion of money from Mumbai International Airport Ltd (MIAL), in which GVK Group has a 50.5% stake and the state-owned Airports Authority (AAI) of India 26%, to other companies of the company, causing a loss to AAI and the exchequer. The amount involved is 800 crore. The ED money laundering case is based on a Central Bureau of Investigation (CBI) case probing the alleged diversion of funds.
The officials said the searches were primarily conducted at the company’s Mumbai and Hyderabad offices. The office of MIAL was also raided, they added. MIAL is a joint public-private partnership venture between AAI, GVK Group, and few other entities.
ED registered a case under the Prevention of Money Laundering Act this month on the basis of CBI’s June 27 First Investigation Report (FIR) that named 13 people, including the Group’s chairman, G V K Reddy, MIAL, and several companies that were given airport contracts.
According to the FIR, the promoters of the Group in MIAL allegedly siphoned off funds “fraudulently adopting various modus operandi” in connivance with their executives and unnamed AAI officials. CBI has alleged MIAL signed fake contracts in 2017-18 with at least nine companies on the pretext of real estate development. HT has seen a copy of the FIR.
AAI signed an agreement with the Group in April 2006 for the airport’s operation, management, development, up gradation, and maintenance. MIAL was to share 38.7% of its revenue as an annual fee with AAI as per the agreement.
The Group did not respond to an email query on the raids. In a June 27 statement, it assured the company will cooperate with CBI’s probe. “MIAL would have provided every assistance had the agency [CBI] sought explanation or any document even if a preliminary enquiry had been initiated. MIAL is a transparent and responsible corporate entity which is committed to cooperate with the agency in its investigation to arrive at the truth.”
CBI and ED are probing GVK Group for alleged irregularities worth over Rs 800 in the Mumbai airport’s development and maintenance.
They have named GVK Group, and 13 people including its chairman, G V K Reddy, his son, G V Sanjay Reddy, and several other companies as well as unknown public servants for alleged irregularities.
The AAI signed an operation, management and development agreement with the Group in April 2006 for the airport’s modernization, up-gradation, operation, and maintenance.
The company is accused of getting into contracts illegally to siphon off funds of the airport.
