CBI books Hyd based GVK's group's chairman, son for siphoning Rs 705 Cr

By Coreena Suares  Published on  2 July 2020 6:28 AM GMT
CBI books Hyd based GVKs groups chairman, son for siphoning Rs 705 Cr

Hyderabad: The Central Bureau of Investigation has booked a case against Hyderabad based GVK group's chairman G Venkata Krishna Reddy and his son G Sanjay Reddy, for allegedly siphoning off Rs 705 Crore. The funds were meant for the development of the Mumbai International Airport. A case under forgery, cheating has also been booked against 9 other companies for their connivance, officials said.

An investigation done by sleuths of CBI, Mumbai found irregularities to a tune of Rs 705 Cr. It revealed that G Sanjay Krishna Reddy, the managing director of Mumbai International Airport Ltd in connivance with unknown AAI staff running the airport, inflated expenditure to benefit them.

In 2006, the Airport Authority of India and GVK Airports Holdings Limited formed a joint venture under Public-Private Partnership (PPP) for upgradation and maintenance of the Mumbai airport. This led to the setting up of Mumbai International Airport Limited (MIAL). The job of modernization, upkeep, operation, and maintenance of MIAL was accorded to promoters of GVK group.

How the money meant for the development of the Airport was siphoned off?

CBI's investigation found that around 200 acres of underdeveloped land parcels in Mumbai, located around the airport were given to MIAL by AAI for development and revenue generation. The MIAL entered into a bogus work contract during 2017-18 with Aishwaryagiri Construction private limited, Kotia Enterprises limited, SBK trade & infrastructure project (India) Limited, M/s Richa Industries Limited, M/s Nice project limited and Aditi Infrabuild and services limited. The contract was allocated on the pretext of real estate development.

MIAL transferred the funds to them but these contracts have never been executed on the ground. "Using bogus Operandi Rs 310 Crore have been fraudulently siphoned off. The nine companies have availed fake input tax credit (ITC). A case has been filed against the nine. The CBI is also investigating several other fake invoices raised by MIAL.

GVK group's role in the fraud

Sources informed the CBI that from 2012 onwards, the GVK group with criminal intimidation cause loss to AAI. It used surplus funds of MIAL to a tune of Rs 395 crore to finance their own group of companies. GVK created forged board meeting resolution with MIAL authorizing to keep the reserve as Fixed Deposit Receipt (FDRs) with Public Sector Undertaking banks in Hyderabad. Further, the group raised loans against these FDR's and used these funds for the benefit of their Hyderabad based GVK group companies at the expense of MIAL.

The CBI has booked a case under section 120 B, 420, 467, 468, 471 of IPC and 13 (2) r/w 13 (1) (d) of Prevention of Corruption Act.

Meanwhile, in response to the case, the spokesperson for Mumbai International Airport Ltd (MIAL) said, “MIAL is surprised to note the registration of case by CBI against MIAL and others. MIAL would have provided every assistance had the agency sought explanation or any document even if a preliminary enquiry had been initiated. MIAL is a transparent and responsible corporate entity which is committed to co-operate with the agency in its investigation to arrive at the truth.”

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