The Enforcement Directorate (ED) on Tuesday carried out raids at multiple locations belonging to Hyderabad-based GVK Group, company that runs Mumbai airport, and its promoters in connection with its money laundering probe in alleged irregularities worth over Rs 800 crore in the development and maintenance of the airport, two officials familiar with raids said.
They said the searches were primarily conducted in Mumbai and Hyderabad offices of GVK as well as the office of Mumbai International Airport Ltd (MIAL) – the Joint venture which runs the Mumbai airport.
The probe agency had registered a case under prevention of money laundering act (PMLA) in the first week of July on the basis of a CBI FIR lodged on June 27.
The FIR named 13 people – including the Chairman of GVK Group, GVK Reddy – the Mumbai International Airport Limited (MIAL), and several companies that were given contracts at the airport.
The GVK Group didn’t respond to an email query on the ED raids.
However, after the FIR on June 27, it had issued a statement saying: “MIAL would have provided every assistance had the agency sought explanation or any document even if a preliminary enquiry had been initiated. MIAL is a transparent and responsible corporate entity which is committed to cooperate with the agency in its investigation to arrive at the truth.”
MIAL is a joint public-private partnership venture between the Airports Authority of India (AAI), GVK Group, and a few other entities. The GVK Group has a 50.5% stake in MIAL, and AAI 26%.
According to the FIR, the AAI entered into operation, management, and development agreement (OMDA) in April 2006 for the airport’s modernisation, upgradation, operation and maintenance as part of the joint venture. MIAL was to share 38.7% of its revenue as an annual fee with the AAI as per the agreement.
“The essence of the agreement was to create a world class facility and at the same time protect the interests of the government of India, promoters and passengers,” said the FIR. “Despite there being a clear cut understanding in the OMDA, the promoters of GVK group in MIAL, in connivance with their executives and the unknown officials of AAI resorted to siphoning of funds fraudulently adopting various modus operandi.”
The CBI has alleged that MIAL got into fake work contracts during 2017-18 with at least nine companies on the pretext of real estate development.