CBI books Trimax IT Infra and management for cheating banks of Rs 862 crore

The firm had been involved with important govt tenders of BSNL, UPSRTC and Bengaluru Metropolitan Transport Corp

The Central Bureau of Investigation (CBI) has booked Trimax IT Infrastructure & Services, and its management for cheating a consortium of banks led by State Bank of India (SBI) to the tune of Rs 862.06 crore. The investigative agency has named the company, its managing director, Surya Prakash Madrecha, its director Chandra Prakash Madrecha, and unknown public servants in this case.

A CBI statement said that searches were conducted at nine locations including residential and office premises of the accused at Mumbai, and Kolhapur among others. The accused had cheated a consortium of banks led by SBI during the period 2009 to 2017. It was further alleged that during the period 2009 to 2017, the accused were sanctioned Credit facilities under consortium banking which were enhanced from time to time.

According to the CBI, the Directors of Trimax IT Infrastructure & Services in conspiracy with others manipulated the books of accounts, diverted the funds released by banks and cheated the banks.

Chequered past

Trimax IT Infrastructure & Services has been involved with significant government projects in the past. According to the company website, Bharat Sanchar Nigam Limited (BSNL) the largest Indian government owned telecom company, had partnered with Trimax, to provide managed Wi-Fi services. This was for enabling cities, governments and enterprises with secure, reliable and premium quality Wide Area Network solutions for enterprise, hospitality, transport, healthcare, education, retail and warehouses.

The Fiber to the Home (FTTH) technology being deployed by BSNL for providing fiber connectivity with unlimited high-speed broadband also had Trimax as a partner.

Trimax had also partnered with the Uttar Pradesh State Road Transport Corporation (UPSRTC) for implementing the Intelligent Transport Management System (ITMS) on a Build Own Operate (BOO) basis. The scope of work involved developing of software, supply of servers, and establishment of connectivity across 107 depots, among others.

In December 2020, Trimax had threatened to stop online advance booking of buses in Uttar Pradesh. According to Trimax, this was because they were not being paid by the government for their services for the previous two years.

In 2016, the Bengaluru Metropolitan Transport Corporation (BMTC) and Trimax had launched Intelligent Transport System (ITS). The system is said to have faced multiple technical glitches and had poor bus tracking facilities. Eventually Trimax started facing financial hurdles and its contract with BMTC ended in July 2021.

Financial woes magnify

In November 2017, Quess Corp, India’s largest staffing company, bought a 51 per cent stake in Trimax Smart Infraprojects, a Joint Venture (JV) with Trimax IT Infrastructure & Services, for Rs 51,000 for its entry into the government’s smart city project in Ahmedabad. Quess also advanced a loan worth Rs 135 crore to the company. Trimax IT Infrastructure & Services was later dragged to the National Company Law Tribunal (NCLT).

Corporate Insolvency Resolution Process for Trimax was initiated in February 2019. By May 2020, it was ruled that Ebix Software India (ESIPL) will pay upfront Rs 75 crore to acquire Trimax. The company owed upwards of Rs 1,918 crore to its lenders, including about Rs 1,700 crore to financial creditors. The liquidation value of Trimax was about Rs 103 crore while the fair market value of the company was Rs 197 crore.