An internal document prepared by the Ministry of External Affairs (MEA) listing those companies that have been identified in alleged money laundering and are also politically exposed. Megha Watch has learnt from sources that this list includes the name of Megha Engineering and Infrastructure (MEIL). This internal document is compiled based on the information sourced from various investigative agencies and intelligence departments of various government organisations.
The purpose of this internal document is to alert international investors about the companies which could be engaged in alleged fraudulent activities. Any business transaction or partnership with the companies listed in this document could be risky considering that they could be slammed with multiple criminal cases – jeopardising their business growth. Any investor would not prefer to be associated with a company that is already facing serious criminal cases or blacklisted.
Who is a politically exposed person?
A politically exposed person is one who has been entrusted with a prominent public function. He/she generally presents a higher risk for potential involvement in bribery and corruption. If a person qualifies as a politically exposed person, then his/her financial transactions would be closely monitored by the anti-money laundering committee. The Securities and Exchange Board of India (SEBI) in its circular of 19 December 2008 mandated mutual fund companies to capture this category of investors. An initial due diligence of a politically exposed person by the financial institutions is an important process before approving their application to prevent possible fraud in the future.
International regulatory agencies such as the Financial Transactions and Reports Analysis Centre of Canada, the Financial Conduct Authority of the UK, the Federal Reserve System, the Federal Deposit Insurance Corporation require companies and businesses involved with politically exposed person to provide additional screening and more stringent due diligence procedures because of the sheer amount of risk involved.
Second largest electoral bonds donor
MEIL is the second largest donor of electoral bonds through which it donated Rs 966 crore to various political parties including the ruling political party BJP who received the maximum donations. The electoral bonds data brought MEIL into the limelight, else it had always stayed away from media attention. Electoral bonds is allegedly one of the tools used by MEIL to allegedly bribe various political parties.
In addition to Rs 966 crore, MEIL’s three subsidiaries – Western UP Power Transmission, SEPC Power and Evey Trans Power donated Rs 220 crore, Rs 40 crore and Rs 6 crore to political parties through electoral bonds. Increasing the overall figure to Rs 1,232 crore.
MEIL was awarded with Rs 14,400 crore Thane – Borivali twin tunnel project in May 2023 by the Mumbai Metropolitan Region Development Authority. MEIL bought electoral bonds worth Rs 140 crore, around the time when the contract was awarded to the company, of which Rs 115 crore were redeemed by the BJP.
In September 2023 the company got a 648 million dollars Mongolia Refinery project which was executed with the Indian government’s assistance. In October 2023 the company bought Rs 160 crore worth bonds of which Rs 150 crore went to the BJP.
In March 2021, MEIL got a civil works contract in Mangalore worth around Rs 300 crore from Hindustan Petroleum Corporation. On April 6 2021, the company purchased bonds worth Rs 38 crore of which Rs 33 crore went to BJP.
In June-July 2019, the company bagged Rs 6000 crore worth contract from public sector energy Oil and Natural Gas Corporation (ONGC) for oil rigs. In May 2019 the company bought bonds worth Rs 60 crore of which Rs 53 crore were redeemed by the BJP. This period coincided with the 2019 Lok Sabha elections.
MEIL is facing an ongoing criminal case investigated by CBI, it has also been raided by the Income Tax department, plus the CAG’s shocking report on Kaleshwaram project alleging corruption, has made it one of the most controversial companies in the country. There are multiple petitions pending in the courts alleging nexus between MEIL and bureaucrats/politicians in securing government contracts.
MEIL directors proximity with the state governments has helped the company in pocketing multiple lucrative governments. Despite poor quality of work and incompetence, the company continues to bag projects because of alleged bribes given to higher ups in the government. But whose money is going as a bribe? It’s not MEIL’s rather taxpayers’ money – once the company gets the contract, it increases the cost of the project from what it was initially in connivance with the bureaucrat and pays it off to them in the form of a bribe.
Sudha Reddy, wife of MEIL’s director Megha Krishna Reddy, in an interview praised PM Narendra Modi for the 2025 Budget.
She also expressed her willingness to join politics in future. This clearly hints towards the family’s connections with politicians and political parties. By supporting his wife in entering politics, Megha aims to boost his business and gain political powers simultaneously.
The internal document prepared by MEA is a big blow to MEIL as it exposes the company as a potentially high risk, warning the international investors to be cautious.