Hyderabad: Central Bureau of Investigation (CBI) has booked Hyderabad-based Coastal Projects Limited for Rs 4736.57 Cr bank fraud. The company promoters, Sabbineni Surendra and Garapati Hairhara Rao, have emerged as one of the biggest defaulters in the recent.
Pertinent to mention that ex-parliamentarian Rayapati Sambasiva Rao and co-directors of Transtroy India Private Limited continue to top the list of biggest defaulters with Rs.7926.01 crore outstandings. They are followed by Hyderabad based IVRCL Infra company, which has also been booked for Rs 4,800 crore fraud.
It is to note that Coastal Projects is currently undergoing a liquidation process under the aegis of the National Company Law Tribunal.
About Coastal Project Private limited
Headquartered in Hyderabad and Bhubaneswar, the company was incorporated in 1995. Fifteen years later, it was converted into a public limited company.
It was engaged in civil engineering works like tunnel construction, metro rail projects besides mining, irrigation, hydropower, and more. It bagged multi-crore projects across India.
However, the company's finances dried up and it started borrowing from banks. A consortium of banks first approved a working capital limit of Rs 140 Crore. But, despite borrowing loans, the company's financial stability wobbled owing to a delay in execution of contracts amounting to an increase in expenditure.
With no alternatives working in its favor, it was referred to the National Company Law Tribunal in 2018 for the liquidation process.
When was the fraud detected?
A forensic audit was conducted between 2013 and 2018 which concluded that the company had defaulted in the early of 2020.
The role of Sabbineni Surendra and Garapati Harihara Rao is comparatively higher in the fraud case. The duo fabricated the account books. While others holding high directorship in the company Sharad Kumar and N Sridhar connived to cheat the bank by mortigaging properties which was already sold prior to the mortigage.
The role another Hyderabad based company Ravi Kailas Builders booked by CBI came into existence when they submitted forged documents to Axis bank to avail a loan to the tune of Rs 90 Crore. CBI investigation found that there was zero role of bank officials in the fraud.
What Investigation reveal?
Between 2013 and 2018, Rs 3008.31 Crore and Rs 1407 .23 Crore was diverted. The fraud committed was Coastal Project submitted fabricated documents to avail loans, properties submitted as a security were already sold out and diverted funds by routing the money through banks other than lenders without obtaining prior permission from the banks.
The company and its promoters Sabbineni Surrendra-Chairman and Managing Director, Garapati Harihara Rao-MD, Sridhar Chandrasekharan Nivarthi-Director, Sharad Kumar-Director, K Ramulu, K Anjamma under section 120 (b) r/w 420 , 468 and 471 (criminal conspiracy, cheating, criminal misconduct) of the Indian Penal Code and 13 (2) r/w 13 (1) (d) of Prevention of Corruption Act.
The CBI also booked another infra company by name Ravi Kallas Builders Private Limited.