ED arrests two people in MP's e-tendering money laundering case
What's the story
The Enforcement Directorate has arrested two people on money laundering charges in the alleged over Rs. 3,000 crore e-tender rigging racket of Madhya Pradesh. "Srinivas Raju Mantena, the founder and Chairman of Mantena Constructions, and his associate Aditya Tripathi of Arni Infra, and a resident of Bhopal, have been arrested under sections of the Prevention of Money Laundering Act (PMLA)," ED said on Wednesday.
Quote
The two have been sent to judicial custody: ED
ED said, "The two have been sent to judicial custody till February 3 by a court. They are accused in the money-laundering investigation into the e-tender scam in Madhya Pradesh."
Background
The case was filed under Kamal Nath Government
The money laundering case stems from an April 2019 FIR filed by the state police Economic Offences Wing (EOW) where Max Mantena, Micro JV Hyderabad, GVPR Engineers Limited Hyderabad among others were named as the "main" beneficiaries of the alleged scam. This police case was filed when the Congress Government under Chief Minister Kamal Nath was in power in the state.
Quote
Large construction companies conspired to tamper e-tenders: ED
"In this case, a large number of infrastructure companies, mostly based in Hyderabad, conspired with few senior government officials and IT service providers of MPSEDC (Madhya Pradesh State Electronics Development Corporation Ltd.) to tamper e-tenders and to illegally obtain large value contracts," the ED claimed.
Details
Earlier, ED raided more than 20 premises of the accused
The ED had also raided more than 20 premises of the accused and others linked to the case in Hyderabad, Bhopal, and Bengaluru earlier this month and seized some digital devices and recorded the statements of some people. ED said, "The police FIR had stated that the state e-procurement portal is managed by MPSEDC, Antares Systems Limited of Bengaluru, and Tata Consultancy Services (TCS)."
Transactions
Investigation has yielded unexplained financial transactions: ED
ED said, "In return, they had taken illegal gratification from the bidding companies. Max Mantena, JV Hyderabad illegally won tender No. 10030 worth Rs. 1,030 crore in this fashion." "Fund trail investigation has also yielded direct unexplained financial transactions between Mantena Constructions and Arni Infra with the accused directors of Osmo IT Solutions who are already in the custody of the EOW," it added.
Tampering of e-tenders
Login credentials were misused and e-tenders illegally accessed
ED said, "They're given a five-year contract for the operation of the portal." "EOW Bhopal has filed a preliminary charge-sheet and it has been established from IP access logs that Osmo IT Solutions Pvt. Limited misused the login credentials provided by Antares, illegally accessed and tampered the e-tenders, and changed the bid values of certain companies to make them the lowest bidder," it added.
Other tenders
'Other tenders are also under scrutiny,' says ED
The ED said that there are a "large number" of other tenders that are also under scrutiny and are "suspected" to have been won by using the same modus operandi. The ED claimed, "Mantena group has seen a big spurt in successful bids in last few years either directly or in association with other Hyderabad-based companies."
Mantena group
SR Mantena played a crucial role in the scam: ED
ED said, "Investigation conducted so far revealed that SR Mantena played a crucial role in the entire scam." "With the assistance of Tripathi, Mantena set up a front entity Arni Infra in Bhopal to route funds for hawala activities. Both Mantena and Tripathi have "admitted" that Mantena Constructions has given sub-contracts of earthworks worth around Rs. 93 crore to Tripathi," the ED added.
Quote
Arni Infra has been created to book fictitious work orders
ED said, "Arni Infra is "simply a front entity" which has been cleverly created by Tripathi at the instance of Mantena to book "fictitious" work orders, generate cash, and to pay bribes for tampering with the e-tenders and also for bribing senior government functionaries."