ED Raids Firms in ₹621 Crore Bank Fraud Case

Rapid Summary:

• The Enforcement Directorate (ED) conducted searches at six Hyderabad locations concerning a large-scale bank fraud linked to SEW Infrastructure Ltd., Prasad and Company (Project Works) Pvt.Ltd., their group companies, and promoters.
• The money laundering investigation stems from a Central Bureau of Investigation (CBI) case against SEW LSY Highways Limited over alleged loan fund siphoning, cheating, and criminal misconduct.
• SEW LSY Highways Ltd., an SPV formed for a highway concession contract in Uttar Pradesh, was sanctioned ₹1,700 crore as term loans by 14 banks led by Punjab National Bank.
• Investigations revealed intra-group sub-contracting practices that enabled diversion of loan funds through entities like SEW Transport Networks Ltd. PSPWPL also received diverted funds which were infused back as equity contributions fraudulently.
• Despite ₹603.68 crore being disbursed for the highway project, it remains incomplete with outstanding liabilities amounting to ₹621.78 crore classified as non-performing assets.
• Recent ED searches led to seizures of financial records/property documents worth approximately ₹120 crore and freezing of 33 bank accounts tied to related individuals/companies.
• Further inquiries into the matter are ongoing.

Indian Opinion Analysis:
This case highlights systemic vulnerabilities within Indian banking regulations regarding large corporate loans issued through consortiums-a recurrent issue that has affected public sector banks significantly in recent years with mounting non-performing assets (NPAs). The misuse of intra-group sub-contracting processes underlines a need for stricter scrutiny mechanisms during disbursement stages and compliance monitoring for entities involved in complex financial structures such as SPVs or EPC contractors.

The freezing of accounts worth meaningful sums showcases certain progress made by enforcement agencies tackling financial crimes; however,broader institutional reforms may be required to deter the replication of such misappropriation techniques across other industries or infrastructure-focused firms receiving public-funded grants/loans.

It is indeed imperative that investigative outcomes succeed in reinforcing accountability among corporates while promoting integrity within india’s financial systems-critical elements necessary for sustaining economic growth amid rising global expectations regarding openness frameworks.

Published: July 23,2025 | Read more at Indian Opinion