Mumbai Airport Case: ED Files Money Laundering Case Against GVK Group, MIAL
The Enforcement Directorate has filed a money laundering case against GVK Group, Mumbai International Airport Ltd. and others to investigate alleged irregularities in the operations of the city-based airport.
The central investigation agency has filed the enforcement case information report—equivalent to first investigation report filed by the police—under the Prevention of Money Laundering Act, after studying a recent CBI FIR filed against the same entities.
The ED will probe if funds were laundered to amass personal assets and if proceeds of crime were generated by the accused, officials said. When contacted, a GVK Group spokesperson said, “We have not received any notice from Enforcement Directorate.”
The FIR filed by the Central Bureau of Investigation pertains to the alleged siphoning of Rs 705 crore from the funds of MIAL, a joint venture of GVK Airport Holdings Ltd. and the Airports Authority of India besides other investors, by showing inflated spending, under-reporting of revenue and fudging of records, among others.
The ED, according to officials, is expected to summon company officials to record their statements. It may also attach their assets under PMLA after some stages of probe are completed.
The CBI has registered a case against GVK Group Chairman GVK Reddy, his son GV Sanjay Reddy, vice chairman of GVK Group and managing director of MIAL, their companies and nine other private firms that were allegedly used to camouflage the inflated figures using sham deals and unidentified AAI officials.
The AAI had entered into an agreement with MIAL on April 4, 2006, for 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, CBI has said. CBI has also carried out raids in Mumbai and Hyderabad after filing the FIR earlier this month.
The CBI has 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 GVK Group allegedly misused the reserve funds of MIAL to the tune of Rs 395 crore to finance their group companies, the CBI FIR has stated.
The agency has 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 underreported the revenue earnings of MIAL by entering into contracts with related parties and meeting their personal and family expenses using MIAL funds, they said.