NEW DELHI: The Central Bureau of Investigation has filed a case against five companies including Madhucon Project Ltd and unknown officials of consortium of banks led by Canara Bank for alleged irregularities in four-laning project of National Highway-33 from Ranchi to Jamshedpur worth Rs 1,655 crores.
The agency says Madhucon Project Ltd, which was given the award of contract in March 2011, formed a special purpose vehicle – Ranchi Expressway Ltd as per requirements for the project, but there was round tripping of equity/subordinate debt infusion and diversion of mobilisation and material advances.
The Jharkhand high court had asked SFIO (serious fraud investigation office) to inquire into the way the project of NH-33 from Ranchi to Jamshedpur was executed, supervision by National Highway Authority of India (NHAI) and advances that were given by the lending banks without commensurate physical progress in the execution of such large project – approximately 163.50kms long highway stretch.
Madhucon incorporated Ranchi Expressway Ltd with K Sriniwas Rao as its CMD, N Seethaiah and N Prithvi Teja as directors.
The company entered into a concessional agreement with NHAI on April 20, 2011 whereupon the project was entrusted to the concessionaire for execution.
Initially, a sum of Rs 1,191.60 crores was to be funded by a consortium of 15 banks led by Canara Bank, however it came down to Rs 1,151.60 crore as State Bank of Travancore backed out. Rs 503 crore was the share of promoters.
The SFIO found during enquiry that Rs 264.01 crore were round tripped, diverted, or claimed to be spent on maintenance and material and mobilisation advance.
Rao, Seethaiah and Teja, and Madhucon’s other companies including Madhucon Infra, Madhucon Toll Highways and Hyderabad based auditor – Kota and Company – were involved in the irregularities.
They all have been booked by CBI in its FIR.
CBI says that total Rs 1,029.39 crore loan amount was released by consortium of banks, however, there was no commensurate progress on the project.
During 2018, the loan account of Ranchi Expressway was declared non-performing asset (NPA). As a result, the NHAI terminated the contract on January 30 this year.