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Spare Indu assets from bankruptcy process: ED

Agency had seized the assets last year as part of its probe into a disproportionate assets case against AP CM Jagan Mohan Reddy.

, ET Bureau|
Jul 04, 2019, 11.29 AM IST
Jagan Mohan Reddy had spent 16 months in jail after the CBI arrested him in 2012.
HYDERABAD: The Enforcement Directorate has approached the National Company Law Tribunal (NCLT), seeking to exempt the assets of Indu Techzone that the agency had attached from potential insolvency proceedings against the company. It has claimed those to be “proceeds of crime” and subject of a money-laundering case pending before another court.

The agency had seized the assets last year as part of its probe into a disproportionate-assets case against YS Jagan Mohan Reddy, the current chief minister of Andhra Pradesh. According to the case, several companies including Indu Techzone had obtained favours from the government when his father, YS Rajasekhara Reddy, was the chief minister of undivided Andhra Pradesh and they, in a quid-pro-quo, invested in his businesses.

Jagan Mohan Reddy had spent 16 months in jail after the CBI arrested him in 2012. The trial in the case, involving multiple charges filed by the CBI and ED, is currently going on.

Meanwhile, the NCLT is hearing arguments in an application filed by Indu Techzone’s financial creditor, IFCI, seeking insolvency proceedings against the company. The bankruptcy court had sought the ED’s response on IFCI’s application. Earlier, the NCLT had ordered insolvency proceedings against Indu Projects, the flagship of the Indu group promoted by Indukuri Syam Prasad Reddy and another company being probed by the central agencies.

In its response to the NCLT’s Hyderabad bench, the ED said it had registered a case in August 2011 against Jagan Mohan Reddy and others under the Prevention of Money Laundering Act, wherein Indu Techzone was one of the suspects.

During the investigation, the agency that probes money laundering cases said, it had identified certain properties, including 150 acres of land on the outskirts of Hyderabad, as “proceeds of crime” and accordingly took possession of those. It then filed a prosecution complaint against the company before the CBI court in Hyderabad.

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