ED attaches assets worth Rs 121 crore of TN-based Neomax Properties
Neomax and group entities allegedly lured investors with returns of 12-30 pc for investments in real estate development, and reinvested funds in shell companies
The Enforcement Directorate (ED) has provisionally attached movable and immovable assets worth Rs 121.80 crore belonging to Neomax Properties Pvt Ltd and its affiliate firms under the Prevention of Money Laundering Act (PMLA), 2002. The attached properties, located across Tamil Nadu, have an estimated market value of around Rs 600 crore.
The Chennai Zonal Office of the ED provisionally attached the assets on April 9, following a provisional attachment of assets worth Rs 117 crore in December 2023. That attachment, with a market value of Rs 207 crore, was later confirmed by the Adjudicating Authority under the PMLA.
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Other entities of the group, including Garlando Properties Pvt Ltd, Transco Properties Pvt Ltd, Tridas Properties Pvt Ltd, Glowmax Properties Pvt Ltd, and key company directors/shareholders —Kamalakannan, Balasubramanian, Veerasakthi and Charles — are also facing ED action for alleged links to financial deceit and misconduct.
Promise of high returns
ED launched its probe following an FIR filed by the Economic Offences Wing (EOW) in Madurai, accusing Neomax Properties and associated entities of defrauding numerous investors. The entities allegedly lured investors with high returns varying from 12 per cent to 30 per cent for investments in real estate developments, which they failed to deliver.
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The ED said the Neomax Group coaxed investors into parting with substantial sums, predominantly in cash, funneling these into a wide array of shell companies and external businesses spanning various sectors.
These include hospitality, healthcare, pharmaceuticals, retail, information technology, renewable energy, logistics, aerospace services, education, fashion, and e-commerce.
The group's fraudulent activities have allegedly left it owing approximately Rs 8,000 crore to its investors, including the promised returns.