Bank fraud, job scam, contracts graft: ED makes damning charges against KN Nehru’s son, brother

CHENNAI: Municipal Administration Minister KN Nehru is under the dock over allegations leveled by the Enforcement Directorate (ED), which had recently conducted raids at premises linked to his MP son and businessman brother.

Apart from charges of orchestrating "diversion" of funds from a Rs 30 crore bank loan, the ED claimed on Friday that widespread corruption has been found in contracts and transfers of the Municipal Administration and Water Supply Department (MAWS).

The federal probe agency said this is a statement after it conducted searches at 15 premises located in Chennai, Tiruchy and Coimbatore on April 7 in the case against a company named Truedom EPC India Pvt Ltd and its key personnel.

KN Nehru's Lok Sabha MP son Arun Nehru and his brother N Ravichandran are "key individuals" in this case and evidence suggests their involvement in orchestrating the "diversion" of funds, the ED claimed. KN Ravichandran is the promoter of the TVH Group, a real estate company.

The minister, MP and Ravichandran could not be contacted for comment on the ED's allegations against them.

The ED added that evidence recovered during the searches "points to a deep-rooted and systemic corruption network within the Municipal Administration and Water Supply Department (MAWS) ".

"The findings reveal pre-fixed commissions for awarding tenders, rigged procurement processes, and a well-organised nexus of officials, middlemen and politically linked individuals," it said.

"The investigation has also uncovered a pattern of illegitimate funds being layered and siphoned through interconnected entities, suggesting the existence of a broader financial and administrative cartel operating across the state," the agency alleged.

It claimed a "huge" number of hawala transactions has been executed across the State for placing "illegitimate" funds for intended purposes.

Evidence of "bribe collection" for transfer or posting of MAWS officials has also been found and further investigation is underway to trace the full scope of this web and quantify the resulting loss to the public exchequer, it said.

The money laundering case against Truedom EPC India pvt ltd and others stems from a Central Bureau of Investigation (CBI) FIR filed on charges of bank fraud involving the "misappropriation" of loan funds worth Rs 30 crore sanctioned by the Indian Overseas Bank (IOB).

According to the ED investigation, Truedom EPC India pvt ltd, a "shell" entity with no wind energy experience, was created "solely" to divert loan funds under the guise of a 100.8 MW windmill project.

The funds were immediately routed through associated shell entities with no real activity, and after layering, substantial amounts were transferred to True Value Homes pvt ltd (TVH Group) and TVH Energy Resources pvt ltd to settle existing liabilities, it said.

The setup, including fake project agreements and paper entities, was designed to mask the diversion, with no repayment effort made before the loan was declared fraudulent, the agency claimed.

During the searches, various "incriminating" documents, digital records and property documents were seized, indicating the layering and siphoning-off of funds, the ED claimed.

It said it has identified assets and properties acquired using the "proceeds of crime" and is in the process of quantifying and attaching these under the provisions of the Prevention of Money Laundering Act (PMLA).