Decoding story of Transstroy Scam: A loan default of Rs 8832 crore

By Newsmeter Network  Published on  31 Dec 2019 5:29 AM GMT
Decoding story of Transstroy Scam: A loan default of Rs 8832 crore

Hyderabad: The official papers of resolution professional in Transstroy India Limited scam reveal that the company owes Rs 8832 crore to 15 banks including Canara and Union Bank of India. Transstroy is currently facing a bank loan fraud and CBI has conducted searches on the properties of TDP Ex MP Rayapati Sambasiva Rao and Cherukuri Sridhar MD of the company.

Transstroy India is into irrigation projects like Indirasagar Polavaram and infrastructure projects like NHAI highways. Transstroy JSC EC UES JG as executing Polavaram Project in AP with an initial outlay of Rs 5788 crore. Transstroy claimed that it completed 31 per cent.

Except for the EPC contract of Jaadalpur Road Project of NHAI, all other works of Transstroy have been either terminated or suspended. Transstroy lost Polavaram contract.

Canara Bank has sanctioned Rs 125 crore under fund-based working capital limits and Rs 600 crore under non-fund based working capital and total to the tune of Rs 725 crore.

Transstroy has mortgaged 33 of its immovable properties and that of guarantees. Transstroy entered into ana agreement it Chinese Stae enterprise CHina CNE Limited at Beijing for an equity cum debt deal of 400 million US dollars and shareholding agreement in 2016 March for infusion of the equity investment amount of Rs 169 million dollars. The company claimed that banks didn't give consent letter.

Banks have initially approached Debt Recovery Tribunal in Hyderabad for recovery under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act. Eight cases were filed by different banks.

Canara Bank filed a petition in NCLT in 2018 stating that the account as declared NPA in 2015 May 30.

According to Resolution Professional GV Narasimha Rao's statement, Transstroy defaulted Rs 990 crore to Canara Bank and res all other 14 banks claimed Rs 7842 crore of loan default by Transstroy.

GV Narasimha Rao, in his response petition in NCLT, said,"The irregularities of account of Transstroy led by Cheruku Sridhar director and shareholder started in 2014.

Transstroy claimed in NCLT petitions that the projects were stalled as NHAI didn't provide the right of way, cost escalation and non-availability of working capital. The key allegation in the forensic audit and CBI FIR is that the company has diverted the loan amounts.

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