Telangana PG medical seats-blocking 'scam': ED seizes cash transaction receipts worth crores

NEW DELHI: The ED on Thursday said it has seized documents related to "cash transactions" worth hundreds of crores of rupees, made from the payment of cash fees and premium by MBBS students as well as post-graduate medical candidates, after it conducted raids in Telangana as part of a money-laundering probe linked to a PG medical seats blocking "scam".

The federal probe agency said it has also frozen bank deposits of Rs 2.89 crore and seized "unaccounted" cash amounting to Rs 1.4 crore after the searches carried out against the Hyderabad-based Malla Reddy Institute of Medical Sciences.

A total of 16 locations in state capital Hyderabad, Khammam and Karimnagar were raided on Wednesday as part of the probe being conducted under the criminal sections of the Prevention of Money Laundering Act (PMLA).

"Unaccounted cash of Rs 1.4 crore was seized from the premises of Malla Reddy Institute of Medical Sciences, while Rs 2.89 crore deposited in a bank account of the institute were frozen," the ED said in a statement, adding that this was an account where the "cash collected" against the medical PG admissions was "suspected" to be deposited.

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The search operations resulted in the seizure of "incriminating" documents, digital devices and records of "cash" transactions running into hundreds of crores of rupees relating to collection of cash fees and premium from PG medical candidates as well as MBBS students, the agency said.

The raids came after the ED filed a money-laundering case in February on the basis of an FIR registered by the Warangal Police on a complaint from the registrar of the Kaloji Narayana Rao University of Health Sciences (KNRUHS), alleging that some agencies are involved in "seat blocking" in collusion with students and private institutions in Telangana and other states and obtaining the relevant documents of candidates required for registration in the KNRUHS.

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The ED said the KNRUHS, during its own inquiries, detected five candidates who informed it that they had not even applied for counselling with it. "Seats were blocked using credentials of high-scoring PG-NEET candidates from other states and after the mop-up round of counselling and the last date of admission, the seats were reported to the university as vacant and such vacant seats were declared as stray vacancies by the university and given to the respective private medical colleges for admission under the management or institutional quota.

"These seats were then sold off at exorbitant premiums ranging anywhere between Rs 1 crore and Rs 2.5 crore," the ED said. To curb the menace of seat blocking, the university had provisioned a penalty on the defaulting candidates it added. However, the ED said the penalty was being paid by or on behalf of the seat-blocking candidates from the premium collected for the sale of the PG Medical seats.