Vasai-Virar: VVMC Town Planning Deputy Director Suspended Over ₹31.85 Crore ED Money Laundering Probe

Mumbai: The Vasai-Virar City Municipal Corporation (VVMC) has suspended deputy director of town planning Yumiganu Shiva Reddy following serious allegations of financial misconduct, including possession of unaccounted assets worth over Rs 31.85 crore and suspected involvement in money laundering.

The move comes amid renewed investigations by the Enforcement Directorate (ED) under the Prevention of Money Laundering Act (PMLA), 2002. According to an official suspension order issued on May 19, the action was taken under Rule 4 of the Maharashtra Civil Services (Discipline and Appeal) Rules, 1979, and Section 56(2)(f) of the Maharashtra Municipal Corporation Act.

ED seized Rs 8.6 crore in unaccounted cash and Rs 23.2 crore worth of diamond-studded jewellery and bullion from Reddy’s premises in Hyderabad's Hafeezpet, on May 14 and 15. The development received widespread attention across national media and social media platforms, prompting the civic body to take immediate disciplinary action.

The Corporation emphasised that the allegations were serious enough to warrant immediate suspension to ensure a fair inquiry.

According to the order accessed by The Free Press Journal, the suspension has been applied retrospectively from May 14. During the suspension period, Reddy will receive 50% of his salary and is prohibited from engaging in any form of private or professional employment outside his official duties.

According to sources, Reddy’s name surfaced after Assistant Commissioner–level officers from VVMC filed a complaint with the Mira Bhayandar–Vasai Virar Police Commissionerate. The complaint alleged a nexus between civic officials and builders responsible for the illegal construction of 41 residential and commercial buildings in Agrawal Nagar, Nalasopara (East). These structures were built on plots earmarked for sewage treatment and dumping grounds. Despite knowing their illegality and pending demolition orders, developers sold flats to unsuspecting buyers, amounting to large-scale fraud.

The Bombay High Court ordered the demolition of all 41 buildings on July 8, 2024. An appeal by residents was dismissed by the Supreme Court, and the demolition was completed by VVMC on February 20, this year

Reddy, who has served in the Town Planning Department since 2012, is suspected of aiding builders in fraudulently acquiring approvals and documents from the Corporation. Reddy has had a controversial tenure. He was previously caught red-handed accepting a Rs 25 lakh bribe in 2016 and was suspended accordingly after spending more than 48 hours in police custody. Although he was relieved from his duties at the corporation due to the lapse of his deputation, CIDCO suspended him from May 9, 2016.

Reddy challenged his suspension and was reinstated following a Bombay High Court order in 2019. He returned to VVMC on February 20, 2019. The Anti-Corruption Bureau's FIR against him was also quashed by the High Court in June 2023, effectively discharging him from the corruption charges.

However, the latest revelations in the ED’s money laundering probe have once again brought him under the scanner, tarnishing the image of the civic body and triggering yet another suspension.

ED sources said that Reddy’s statement will soon be recorded as part of the ongoing money laundering investigation. He is suspected of helping builders regularize illegal constructions by issuing fraudulent approvals and possessing disproportionate assets.

Sources also indicated that several other civic officials are under the scanner and their roles are likely to be revealed in the coming days.