Hyderabad: Enforcement Directorate on Tuesday conducted searches at six locations in Hyderabad in connection with a Rs 621 crore loan fraud involving SEW Infrastructure Limited (SIL), Prasad & Company (Project Works) Private Limited (PSPWPL), their group entities, and directors.The searches were carried out under the Prevention of Money Laundering Act. The ED seized financial records, evidence of fund diversion, and property documents valued at approximately ₹120 crore, allegedly in the names of the promoters and their family members. As part of the search operations, the ED also froze 33 bank accounts linked to SIL, SEW Transport Networks Ltd (STNL), their directors, and relatives.The searches were carried out based on a CBI FIR (dated Sept 16, 2020), filed by the agency’s anti-corruption branch, Hyderabad, against SEW LSY Highways Ltd and others under charges of criminal conspiracy, cheating, and violations of the Prevention of Corruption Act. The case involves the alleged diversion and siphoning off sanctioned loan amounts, resulting in significant losses to public sector banks.SEW LSY Highways was established as a special purpose vehicle (SPV) to execute a highway project awarded by the Uttar Pradesh State Highway Authority to a consortium comprising SIL and PSPWPL. The project was backed by a Rs 1,700 crore term loan sanctioned by a consortium of 14 banks led by Punjab National Bank, of which Rs 603 crore was disbursed.The ED investigation revealed that SIL had awarded the engineering, procurement, and construction contract to its group entity STNL, which subsequently subcontracted it at lower rates to entities, including PSPWPL.PSPWPL further subcontracted the work at even lower rates, suggesting a circular flow of funds among related entities, designed to divert the loan proceeds, ED alleged.The probe also revealed that PSPWPL, which held a 30% stake in SEW LSY Highways, reportedly received diverted loan amounts and routed them back to the SPV as promoter’s contribution, in violation of loan conditions.The highway project remains incomplete, and the loan has since turned into a non-performing asset, with Rs 621 crore outstanding to the lending banks.
