ED files laundering case against GVK and MIAL in Mumbai airport ‘fraud’

MUMBAI: The Enforcement Directorate (ED) on Tuesday registered a

money laundering case

against GVK group, its chairman Venkata Krishna Reddy, Mumbai International Airport (MIAL) and its managing director Sanjay Reddy, along with others for alleged irregularities worth Rs 705 crore in the development of Mumbai airport.


ED’s probe under PMLA (Prevention of Money Laundering Act) is based on an FIR registered by the CBI on June 27 against 13 people, including Venkata Reddy and his son Sanjay Reddy, and unknown officials of Airports Authority of India (AAI). CBI had searched GVK’s premises in Mumbai and Hyderabad following registration of the FIR. It is alleged that MIAL indulged in

fraudulent transactions

to help GVK, causing a loss to AAI, a government entity that was managing the airport operations earlier.

The ED will probe financial transactions of MIAL, GVK group companies and other private companies roped in for the airport development work. The central government agency will follow the money trail generated through the allegedly fraudulent transactions.

MIAL is a

joint venture company

formed in April 2006, in which GVK Airport Holdings holds 50.5%, AAI 26%, and the rest is with foreign entities. MIAL was given the task of the airport’s operational management and maintenance. According to the agreement, MIAL was to manage the operations and share 38.7% of its earnings with AAI first, and keep the rest with the company for modernization of the airport.

It is alleged GVK and MIAL, in connivance with AAI officials, committed fraud.

In one of the instances, AAI gave a 200-acre land parcel near the airport to MIAL for development and revenue generation. But MIAL allegedly entered into a bogus contract in 2017 with Aishwaryagiri Construction, Kotia Enterprises, SBK Trade & Infrastructure, Subhash Infra, Aqua Tech Solutions, MV Omni Projects, Richa Industries, Nice Projects and Aditi Infrabuild for real estate development.

MIAL allegedly transferred Rs 310 crore to these companies but the contracts were not executed.

In another instance, it is alleged the accused forged a board meeting resolution of MIAL to use Rs 395 crore surplus fund to create a fixed deposit in Bank of India’s Hyderabad branch. GVK allegedly raised loans against the FD for other group companies. The accused also allegedly allotted premium retail areas of the airport to companies owned by their family members, relatives and close employees at low rates that caused a revenue loss to AAI.