Hyderabad: Chennai unit of Central Bureau of Investigation has booked Hyderabad based Ind Bharath Power Gencom limited, represented by YSRCP MP Kanumuru Raghu Rama Krishna Raju and family, in Rs 237.84 Crore bank fraud case. This is the second case of cheating registered against the parliamentarian in a period of 6 months.
The CBI was acting on a complaint filed by officials of State Bank of India-Chennai. It is alleged that Ind Bharath Power Gencom limited, having its head office in Bowenpally of Hyderabad used forged documents as genuine and siphoned of bank funds to the tune of Rs 237.84 crores.
Ind Bharat Power Gencom Limited is a coal-based power plant with a capacity of 189 (MW) situated in Tuticorin of Tamil Nadu. The company back in 2006 sought a loan from the SBI and over the years the sanction limited increased and the total sanctioned was Rs 150 crore. It was in 2017 that the Tamil Nadu plant shut down, resulting in the creditors filing an application in the National Company Law Tribunal- Hyderabad.
Forensic Audit found?
The fraud came to light when a forensic audit report was submitted in 2020. As part of the process a forensic audit was conducted and it resulted in exposing the unlawful gains including forgery by manipulating and submission of fake financial statement, fabrication of fictitious transactions, diversion of funds and misappropriate of funds for purposes other than for the purpose for which the funds were released from the bank.
The company lied over the purchase of coal worth Rs 196.15 Cr and Rs 194.19 Cr respectively. "Banks has sanctioned the credit facilities to the borrowers for the use of specific purpose, but instead the borrower has misused the funds by causing loss to public money," the audit report said.
The directors represented four company including Ind Bharath Power Infra Limited, Arkay Energy (Rameshwaram) Ind Bharath Thermal Power limited and Ind Bharath Power (Madras) limited.
The CBI has booked other directors including K Indira Priyadarshini (spouse to the MP), Ambedkar Rajkumar Ganta, Dumpala Madhusudhana Reddy, Narayana Prasad Bhagavathula, Ramachandra Iyer Balakrishna and others in the case.
CBI based upon a complaint filed by Punjab National Bank, booked IN Barath Thermal Power limited company for siphoning off loan amount approved for a power plant to the tune of Rs 826.17 Crore.
On October 7 2020, CBI sleuths carried out searches at 11 locations in Mumbai and Hyderabad. CBI also raided the headquarters of the company at Secunderabad.
According to CBI, IND-Barath through its directors approached a chain of corporate banks for financial assistance. Around Rs 941.80 Crore debt was sanctioned in the company's favor for setting up a 300 MW coal-based group captive power plant at Honkan Village in Karnataka. However, the project could not take off because there was no environmental clearance. Therefore, it was shifted to Tamil Nadu.However, the lending banks found persistent irregularities in the accounts of the directors. They were verbally informed but no response was received.
Investigations revealed that during 2014-15 and 2015-16 the company purchased 14,70,861 metric tons of coal amounting to Rs 516.20 Crore. The purchase was through 31 consignments.
An independent forensic audit in 2019 found large scale fraud. "A visit to the thermal power plant in 2019 found that no coal has been laid at the plant and only a small quantity of material which appears to be inglike fly ash was laying, of quantity 16000 metric tons. No receipt of purchase was found at the office in Tamil Nadu. The management however explained that the coal was destroyed by termites" CBI said.
Investigators found that the company purchased coal for Rs 516.20 Crore. Of which, 5,26,846 metric tons of coal worth Rs 187.39 crore was not transported from the port to the factory premises. Instead, it was ferried to IND-Bharath Power Gencom limited located near the plant.
The forensic audit report concluded that there are several contradictions between the records maintained by the company with no substantial evidence regarding the usage and movement of coal. Material worth Rs 243.08 crore is doubtful.
The CBI concluded that the company cheated banks of Rs 826.17 crore. The funds were diverted by committing fraud against the banks.