Rs.7926 Crore Bank Loan Fraud in Canara Bank, Central Bank, Union Bank and Other Multiple Banks
The Enforcement Directorate (ED) has provisionally attached immovable properties worth Rs. 48.71 crore in connection with a major bank fraud case involving Transstroy India Ltd. (TIL) and others. The attachment includes land parcels and residential properties, which were seized under the Prevention of Money Laundering Act (PMLA), 2002.
The ED’s action follows an investigation into a loan fraud case involving TIL, a company owned by former Member of Parliament (MP) and senior Telugu Desam Party (TDP) leader Rayapati Sambasiva Rao. In August of the previous year, the ED conducted searches at the company’s premises as part of the investigation into a money laundering case linked to a loan fraud amounting to Rs. 7,926 crore.
This fraud is considered one of the largest loan scams in India. TIL had reportedly obtained loans from Canara Bank and 13 other banks. The ED had previously conducted searches at multiple locations, including the offices and residences of Rayapati and other company promoters, in cities like Hyderabad and Guntur.
The case was registered under the PMLA based on an FIR filed by the Central Bureau of Investigation (CBI). According to the CBI, the accused allegedly diverted borrowed funds to group companies, shell companies, and other entities.
The CBI had filed an FIR in 2020 against TIL, its Chairman and Managing Director (CMD) Cherukuri Sridhar, Rayapati Sambasiva Rao, Akkineni Satish, and others. The charges included criminal conspiracy, cheating, forgery, falsification of documents, and violations under the Prevention of Corruption Act. The loans were obtained from a consortium of banks, including Canara Bank, Central Bank of India, Union Bank of India, and several others, between 2013 and 2014.
The loan accounts eventually became non-performing assets (NPA) due to alleged irregularities, such as frequent devolvement of Letters of Credit, non-payment of interest on working capital limits, and failure to route operations through the consortium banks.
