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CBI books infra firm for alleged cheating to the tune of Rs 1,000 crore

Press Trust of India  |  New Delhi 

The CBI has on Tuesday booked the promoters of the Ranchi Expressway Ltd, including its CMD K Srinivasa Rao, for allegedly causing a loss of over Rs 1,000 crore to a consortium of banks led by Canara Bank, officials said.

The agency has registered an FIR against CMD K Srinivasa Rao, its directors N Seethaiah, N Prithvi Teja and the company itself, besides Project Ltd, Infra, Toll Highway Ltd and auditing firm named 'Kota and company'.

The FIR has also been registered against unidentified officials of the consortium of banks.

The matter pertains to four-laning of 163-km stretch on NH-33 connecting Ranchi to for which the National Highways Authority of had chosen Madhucon Project Ltd on March 18, 2011.

A special purpose vehicle was created for the project on the basis of design-build-finance-operate and transfer model, the officials said.

With an estimated cost of Rs 1,655 crore for the project, a consortium of 15 banks led by agreed to fund Rs 1151.60 crore with a contribution of Rs 503.60 crore by promoters, they said.

"It was mandatory for and its sponsors to contribute equity to the extent of at least 25 per cent of the total project equity contribution i.e Rs 115.80 crore before initial drawdown date as per contract with the banks," an said.

The promotor-directors of Ranchi Expressway K Srinivasa Rao, N Seethaiah and N Prithvi Teja round tripped Rs 50 crore, diverted Rs 22 crore, claimed Rs 98 crore as maintenance and used Rs 94 crore as mobilisation advance totalling to about Rs 264.01 crore, according to an SFIO report, they said.

The directors allegedly indulged in fraudulent acts to get a total loan amount of Rs 1,029.39 crore released by the consortium of but no progress was made on the project with loan becoming a non-performing asset in 2018, they said.

On January 31, 2019, the National Highways Authority of terminated its contract with the company and forfeited Rs 73.95 crore by way of encashment of the guarantee with Canara Bank, they said.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, March 12 2019. 20:50 IST