Agrigold Directors Stashed Funds In Off-Shore Entities In Cayman Islands

HYDERABAD: The Enforcement Directorate arrested Agrigold Chairman Avva Venkata Rama Rao on  Wednesday. Along with him, two directors A Seshu Narayana and A Hema Sundar Prasad were produced before the Prevention of Money Laundering Act (PMLA) court, which granted 14 days of judicial custody.

Agrigold has allegedly defrauded about 32 lakh people to the tune of Rs 6,380 crore. Depositors' money was diverted by Agrigold to other businesses by forming over 170 shell companies. Some of these companies were setup abroad and large amounts of funds were diverted to these off-shore entities, Enforcement Directorate (ED) said in a release.

Earlier, searches were conducted at the residences of the directors, including the auditors' homes at Vijayawada and Hyderabad where Rs 22 Lakh cash, property documents and digital devices were seized by the ED.

The ED is investigating the  Agrigold scam that rocked the Telugu states  under the Money Laundering Act,  on the basis of cases registered in AP, Telangana and Karnataka.

The promoters’ names also figured in Paradise Leaks and they had incorporated companies with the help of Mossack Fonsenca - a  Panama-based Law firm in Cayman Islands, according to an ED press release.

A V Rama Rao who had earlier worked in the Golden Forest CIS fraud scheme perpetrated the fraud. He had hatched a conspiracy with his seven brothers and other associates to set up more than 170 companies. After which he started collecting deposits from the general public with a promise of providing developed plots or farm lands or withdrawal at a high rate of return on maturity or pre-term closure.

Thousands of commission agents were engaged to lure people with various schemes for hefty commission and managed to collect Rs.6,380 crore from 32,02,628 such investors. But in the end the investors neither got plots nor could recover their deposits.

Although the accused collected deposits from 32 lakh investors, they never developed lands sufficient to give plots to all the investors.

Even by their unverified claims, at the end they had only 5.5 lakh plots available with them, the press release said.

Rama Rao and his family members siphoned off the money and illegally diverted the public deposits, and invested in countless other private companies directly owned by their family members.

After realising that they were cheated by the company, the depositors had approached the previous TDP government which did not respond. AgriGold victims' organised protests across the state .They had appealed to YS Jagan Mohan Reddy, who was then the leader of the opposition, who was at the time conducting the Praja Sankalpa Yatra. During the Padayatra he assured them of support and promised to pay the victims who lost money in the scam.

After coming into power as the Chief Minister of Andhra Pradesh, the state government made a payment of Rs 263.9 cores to 3,69,655 AgriGold victim-depositors whose deposits were less than Rs 10,000 with the company in the first phase in tune with  his promise made during the Padayatra.