CBI books YSRCP MP, 10 others in ₹826-crore bank fraud case

Raghu Rama Krishna Raju, wife directors of company that allegedly cheated a consortium led by PNB.

The Central Bureau of Investigation has booked YSRCP (Yuvajana Sramika Rythu Congress Party) MP Kanumuru Raghu Rama Krishna Raju, his wife Rama Devi and nine others for allegedly cheating a consortium led by the Punjab National Bank (PNB) of over ₹826 crore, said the agency.

“The agency has conducted searches at 11 locations in Hyderabad, Mumbai and West Godavari in Andhra Pradesh, on the premises of Ind-Barath Thermal Power Limited, the borrower company which is located in Telangana’s Secunderabad, and other accused persons,” said a CBI official. Mr. Raju and his wife were also directors in the company.

In the complaint, the banks have alleged diversion and misappropriation of funds from 2014 to 2018. Among those named in the case are the company’s managing director and other directors.

The PNB alleged that it declared the loan account as a fraud in November 2019, after the other banks also took the same action.

According to the complaint, the company’s directors had approached the bank’s corporate branch in Delhi for the credit facilities.

Ind-Barath Thermal Power Limited, earlier known as Ind-Barath Power (Karwar) Limited, was to initially set up a 300 MW coal-based captive power plant in Karnataka. However, due to environmental clearance related issues, it shifted the project to Saminathan and Ottapidaram villages in Tamil Nadu’s Tuticorin.

The company was sanctioned a senior debt amounting to ₹941.80 crore and subordinated debt of ₹62.80 crore to part finance the project, which was completed. Subsequently, it sought working capital facilities to the tune of ₹300 crore in April 2014.

There were persistent irregularities in the accounts of the company, which were brought to its notice by all the lenders, alleges the FIR.

However, as alleged, no corrective action was taken and the loan accounts turned non-performing assets. The banks got a forensic audit done, which detected several alleged financial irregularities. The company violated the conditions by not routing the sale proceeds through the accounts with the lenders.

Certain transfers were made to the related parties through book entries to the detriment of lenders. During the check period, the company allegedly paid ₹267 crore to the related parties.

An additional amount of ₹41 crore, recoverable from non-related entities, was also transferred to the related parties through book entries, apart from the excess cash flows of ₹140 crore, according to the FIR.

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