Rs.621 Crore Loan NPA in PNB and 13 Other Banks, Total Rs.1700 Crore Loan approved by Banks
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The Enforcement Directorate (ED), Hyderabad Zonal Office, carried out search operations at six locations in Hyderabad on 22nd July 2025. These searches were conducted under the Prevention of Money Laundering Act (PMLA), 2002 in connection with a bank fraud case involving SEW Infrastructure Ltd (SIL), Prasad & Company (Project Works) Pvt. Ltd. (PSPWPL), their group companies, and directors.
The ED began its investigation after receiving an FIR from the CBI’s Anti-Corruption Branch (ACB), Hyderabad. The case involves SEW LSY Highways Ltd. and others, who have been booked under various sections of the Indian Penal Code (IPC), 1860 and the Prevention of Corruption Act (PC Act), 1988. The allegations include cheating, siphoning and diversion of loan funds, and criminal misconduct, leading to a huge loss of public money.
How the Fraud Happened
SEW LSY Highways Ltd. was created as a Special Purpose Vehicle (SPV) to carry out a road project awarded by the Uttar Pradesh State Highway Authority to a consortium led by SIL and PSPWPL. To finance the project, a term loan of ₹1,700 crore was given by a group of 14 banks, led by Punjab National Bank (PNB).
The SPV gave the main construction contracts to SEW Infrastructure Ltd. and its group companies, which then sub-contracted the work to other companies. One of the group firms, SEW Transport Networks Ltd. (STNL), gave parts of the work to PSPWPL, which again sub-contracted it to others—each time at lower values. This chain of sub-contracting was used to divert and misuse the bank loan rather than using the full funds for the road project.
Loan Money Misused as Promoters’ Contribution
According to the loan terms, the promoters of the company were required to contribute their own money. However, the ED found that a portion of the bank loan was illegally routed through PSPWPL (which owned a 30% stake in the project company) and then reused as the promoter’s own contribution. In total, banks had disbursed ₹603.68 crore to the project. But the project was never completed, and the loan turned into a Non-Performing Asset (NPA), with an outstanding amount of ₹621.78 crore still unpaid to the banks.
During the raids, the ED seized key financial documents showing signs of fund diversion. They also recovered property documents linked to the promoters and their family members, with a total market value of around ₹120 crore. In addition, 33 bank accounts belonging to SEW Infrastructure Ltd., SEW Transport Networks Ltd., and their directors and family members were frozen.
The ED is continuing its investigation into the case. The current findings suggest a well-planned misuse of public money, where bank loans were routed through a network of companies and individuals for personal gain, instead of being used for the intended infrastructure project.
More details will be released soon.