The Enforcement Directorate (ED) has filed a money laundering case against GVK Group companies as well as its chairman Dr GVK Reddy and his son GV Sanjay Reddy, in connection with irregularities amounting to Rs 705 crore in the development and running of the Mumbai airport, PTI reported on Tuesday, 7 July.
The case was filed by the ED after the Central Bureau of Investigation (CBI) registered an FIR against Dr GVK Reddy, Mumbai International Airport Limited (MIAL, a joint venture between GVK Group and the Airports Authority of India) and AAI officials on 27 June.
The ED case under the Prevention of Money Laundering Act (PMLA) is tied to the CBI investigation, involving the money from the proceeds of the crime from the illegal activities in that case.
The CBI claims that several hundred crores were siphoned from the funds of MIAL by fudging the accounts of the company which runs the Mumbai International Airport.
The money was allegedly routed to companies in the GVK Group using sham deals for infrastructure development, with the connivance of AAI officials. AAI entered into a public-private partnership with the GVK Group and some foreign entities to form MIAL in 2006.
According to the Hindustan Times, the CBI FIR alleges that Rs 310 crore was siphoned off from MIAL’s surplus funds to GVK companies in 2017-18, with Rs 395 crore taken away from 2012 to 2017. The money was hidden in inflated expenditure figures. The CBI also alleges that the GVK Group assigned premium retail areas of the Mumbai aiport to family members at reduced rates, which cut into MIAL’s revenue, causing a loss of several crores.
A GVK spokesperson told the Hindustan Times that they had not received any notice from the ED about the case yet. MIAL had expressed surprise about the CBI FIR, while the AAI says it is writing to GVK and MIAL to ascertain what had happened. There have been raids in Mumbai and Hyderabad in relation to the case thus far, but no arrests at this time.
(With inputs from the Hindustan Times and PTI.)
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