ED attaches RKM Powergen’s movable and immovable properties worth over ₹1,900 crore

The Directorate of Enforcement (ED), Chennai, has issued orders for freezing fixed deposit receipts (FDRs) and mutual funds amounting to ₹912 crore and immovable properties valued at approximately ₹1,000 crore belonging RKM Powergen Private Limited. RKM Powergen is held by Andal Arumugam, S. Arumugam and others. The investigation was carried against RKM Powergen under the provisions of Prevention of Money Laundering Act (PMLA), 2002.

In a press release issued on Tuesday, the ED initiated investigation on the basis of a First Information Report (FIR) registered by the Central Bureau of Investigation (EOW) New Delhi, with regard to the alleged fraudulent acquisition of the Fatehpur East Coal Block in Chhattisgarh, allocated by the Union Ministry of Coal for the power sector.

The ED investigation revealed that RKMPPL secured a loan from the Power Finance Corporation (PFC) based on the coal block allocation. A significant portion of these funds amounting to ₹3,800 crore  was transferred to a foreign entity named MIPP, which is controlled by RKMPPL, for the purchasing of the coal block by overvaluing the plant and machinery.

Further investigation revealed that following the coal block allocation, RKMPPL issued 26% of its shares to a Malaysia-based Mudajaya Corporation Bhd. and 10.95% to Enerk International Holdings Limited, both at a premium of ₹240 per share. In contrast, 63.05% of shares were allotted to RKMPPL at face value. The valuation methodology lacked transparency as the auditors’ fair valuation assessment was not applied consistently. Subsequent investigation found that Mudajaya Corporation funded its ₹240 per share premium by rerouting PFC-sanctioned funds intended for equipment procurement from MIIP. This effectively resulted in the round-tripping of project funds. An estimated ₹1,800 crore was systematically routed back to RKM PPL through foreign entities under the guise of equity participation.

During the search operations, multiple mobile phones and electronic devices containing substantial incriminating evidence were seized.