The Central Bureau or Investigation (CBI) on Wednesday filed a corruption case against debt-laden IVRCL, a listed firm, its managing director Sudhir Reddy and others for an alleged bank fraud of over Rs 4,837 crore, in a consortium led by State Bank of India.
The Hyderabad-based firm, which had executed major projects across the country, is under liquidation due to mounting debts and defaults. In July 2019, National Company Law Tribunal ordered liquidation after the revival plan failed.
The federal agency has conducted searches since Wednesday morning at the residential and official premises of the directors of IVRCL at Hyderabad which led to recovery of several incriminating documents.
Other people named in CBI’s first information report include R Balarami Reddy, who is a joint managing director of the company and few bankers.
The case was registered following the complaint from SBI. It was alleged that the (accused) in connivance with unknown public servants and others defrauded the consortium of public sector banks, CBI spokesperson said.
Other than SBI, IDBI Bank, Canara Bank, Andhra Bank, Corporation Bank, EXIM Bank, Punjab & Sind Bank, Union Bank of India are the part of the consortium which has faced the huge loss.
CBI further alleged that the borrower company represented by its directors had availed various credit limits from a consortium of banks, without repaying the loan amount.
CBI cites the forensic audit report ordered by the banks consortium, which said that the company made payments to related parties through Letter of credit without recording any purchase transactions in the books and routed the funds to the account of the company and thereby misappropriated the bank funds.