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The Visakhapatnam Sub-Zonal Office of the Directorate of Enforcement has provisionally attached 50 immovable properties and five flats valued at Rs 18.33 crore belonging to Kallam Peri Reddy, his family members, and associates across Andhra Pradesh and Telangana. The statutory attachment was executed under the provisions of the Prevention of Money Laundering Act, 2002, in connection with an ongoing investigation into loan fraud involving Kallam Modern Rice Mills Private Limited and other connected entities. Central investigators initiated the money laundering probe following an FIR registered by the Economic Offences Wing of the Central Bureau of Investigation, Chennai, on a formal complaint lodged by the State Bank of India, formerly the State Bank of Hyderabad, Guntur branch. The criminal case named Kallam Modern Rice Mills Private Limited, Sri Ramabrahma Modern Rice Mills Private Limited, M/s Sri Vinayaka Traders, and several associated individuals as primary accused parties.
Bank Credit Secured Using Forged Collateral Deeds
According to the findings established during the multi-agency investigation, the commercial borrower group secured credit facilities amounting to Rs 24.57 crore between 2010 and 2013 from the Arundelpet branch of the erstwhile State Bank of Hyderabad in Guntur. The credit lines were sanctioned by the bank against collateral securities submitted by the borrowers. Subsequent forensic verification established that the title deeds furnished as collateral for the landed properties were fake and forged. Once the financial institutions disbursed the credit limits, the management deliberately diverted the capital away from sanctioned commercial operations into non-designated channels. This calculated diversion of bank funds prevented recovery and caused a direct financial loss of Rs 18.33 crore to the lending public sector bank.
Network of 26 Shadow Entities Managed by Promoters
Further scrutiny into the financial operations of the promoter group revealed an extensive network comprising around 26 entities registered in the names of Kallam Peri Reddy’s relatives, salaried employees, and business associates. This network encompassed the three primary borrowing concerns, namely Kallam Modern Rice Mills Private Limited, Sri Ramabrahma Modern Rice Mills Private Limited, and M/s Sri Vinayaka Traders. A comprehensive audit of the banking transactions revealed systematic cash withdrawals totaling approximately Rs 23.81 crore from the active cash credit accounts of the three borrower firms. These liquid withdrawals were conducted under the personal names of company accountants, mill workers, and Kallam Peri Reddy himself, obscuring the paper trail and circumventing regular commercial banking channels.
Loan Proceeds Converted into Real Estate Holdings
Financial tracing demonstrated that the liquid funds withdrawn from the controlled bank accounts were systematically deployed to acquire substantial real estate assets. The investigation uncovered that Kallam Peri Reddy transferred ownership of multiple immovable properties to his relatives and personal associates without receiving any valid sale consideration. The transferees served merely as namesake title holders, while Kallam Peri Reddy retained continuous and complete beneficial ownership of the assets. Treating these real estate holdings as direct proceeds of crime generated through scheduled offences, the central agency provisionally attached 50 immovable land parcels valued at Rs 16.88 crore alongside five residential flats valued at Rs 1.45 crore across Andhra Pradesh and Telangana. Enforcement officials confirmed that further investigation into the broader money laundering apparatus remains in progress.
