Hyderabad: Officials of the Enforcement Directorate (ED) and the Income Tax Department raided the home and offices of former union minister and Telugu Desam Party (TDP) Rajya Sabha MP Y. S. Chowdary, and issued a summons notice for further investigation by the agencies. The searches were conducted in seven locations in Hyderabad and one in New Delhi on Friday. Chowdary, who owns the Sujana group of companies and is also a close aide of TDP supremo and Andhra Pradesh chief minister N. Chandrababu Naidu, has been called for questioning on November 27. The ED has claimed that the MP’s group of companies have defrauded banks to the tune of Rs.5,700 crore.

The raids come just days after Naidu alleged publicly that the Bharatiya Janata Party-led Centre was “misusing" government agencies to target his party’s legislators. On 8 November, the AP government also revoked its general consent given to the CBI to probe cases in the state. A TDP functionary, who did not want to be quoted, said that the action by the ED was a result of Naidu bringing together regional parties and the Congress on an “anti-BJP" platform.

The ED jumped into action after the Central Bureau of Investigation (CBI), Bengaluru, registered three First Information Reports (FIR), based on complaints from three banks stating that the total loss caused to the consortium of banks to the tune of 364 Crores (Central Bank of India – 133 Crores, Andhra Bank – 71 Crores and Corporation Bank – 59 Crores) by M/s Best & Crompton Engineering Projects Ltd, Chennai (BCEPL), who had obtained loans from these banks by falsification of accounts and submission of false statements, said a press release.

Based on these FIRs, investigations under the Prevention of Money Laundering Act (PMLA) were initiated by the Directorate of Enforcement, Chennai. The investigation further led to searches in offices and residential offices of key officials from BCEPL at Chennai, Bengaluru and Hyderabad.

“Investigations revealed that all the Directors of various Sujana Group Companies act under the instructions of Shri Y.S. Chowdary, which is evidenced by the email correspondences and communications recovered from the business/residential premises of Directors of BCEPL," stated the press release.

The release also said that in their voluntary statements tendered under Section 50 of PMLA, directors of BCEPL had stated that Chowdary is the person responsible for all the activities of Sujana group of companies and that they tendered their signatures at his insistence.