The Directorate of Enforcement (ED), Visakhapatnam Sub-Zonal Office, has provisionally attached immovable assets valued at Rs. 1.44 crore under the Prevention of Money Laundering Act (PMLA), 2002, in connection with a case of cheating involving IDBI Bank. The case pertains to the fraudulent acquisition of Kisan Credit Card (KCC) Fish Tank loans. The attached properties, registered in the name of the wife of loan aggregator VSKDN Somaraju, include agricultural land, plots, and a flat located in Andhra Pradesh.
Background of the Case:
The ED initiated its investigation based on an FIR filed by the Central Bureau of Investigation (CBI), Visakhapatnam, under several sections of the Indian Penal Code (IPC) and the Prevention of Corruption Act, 1988. The FIR names individuals including Kumar Pappu Singh, Kusumpudi Pullamraju, Vanapalli Venateswara Rao, Jonnala Jaganmohana Rao, and VSKDN Somaraju, who are accused of conspiring to fraudulently obtain KCC Fish Tank loans from IDBI Bank, Palangi Branch, totaling Rs. 74.99 crore.
Investigation Findings:
The ED’s investigation revealed that the primary accused—Kusumpudi Pullamraju, Vanapalli Venateswara Rao, Jonnala Jaganmohana Rao, and VSKDN Somaraju—acted as “aggregators” for the KCC loans sanctioned to 14 borrowers and were the ultimate beneficiaries of the fraudulent scheme. These individuals allegedly conspired with IDBI Bank officials and others to secure loans totaling Rs. 6.59 crore through the use of fabricated documents, mainly in the names of ineligible individuals such as their employees, family members, and friends.
Further investigation uncovered that the collateral securities offered against the loans were grossly inflated in collusion with corrupt valuers. The sanctioned loan amounts were then diverted from the borrowers’ accounts into the aggregators’ and other accomplices’ accounts, with cash withdrawals made based on the aggregators’ instructions. The diverted funds were utilized by the aggregators to acquire immovable properties, both in their own names and in the names of their family members. Additionally, the funds were invested in other businesses and used to repay old loans.
Previous Attachments and Developments:
This is not the first instance of ED action in this case. The ED had previously attached movable and immovable properties worth Rs. 51.45 crore belonging to another aggregator, Kumar Pappu Singh, who facilitated loans for 87 borrowers. The attachment was confirmed by the Adjudicating Authority under PMLA.
A Prosecution Complaint has been filed by the ED before the Hon’ble Special Court (PMLA), Visakhapatnam, on 27th December 2022. The Hon’ble Court has since taken cognizance of the matter.
Ongoing Investigation:
The investigation is still ongoing, and further developments are expected as the ED continues to examine the case.
