‘Accused borrowed funds by misrepresentation, falsified books of accounts’

NEW DELHI (TIP): The CBI on Thursday, June 24, conducted searches in connection with a case registered against C.G. Power and Industrial Solution Limited, its former chairman-cum-managing director Gautam Thapar and others for allegedly cheating a consortium of banks of ₹2,435 crore (USD 3.3 billion). “The searches were carried out in Delhi, Gurugram and Mumbai,” said a CBI official. The case has been registered on a complaint lodged by the SBI on behalf of all the lenders, alleging fraud committed by the borrowers from 2015 to 2019.Earlier this month, the agency had booked Avantha Realty Limited and its promoter, Mr. Thapar, for allegedly cheating the Yes Bank of ₹466.51 crore in 2017-19. He is under investigation in another CBI case instituted in March last year against former Yes Bank managing director Rana Kapoor and others.

In the latest case, among those named as accused are C.G. Power and Industrial Solution’s then chief executive officer and managing director K. N. Neelkanth; executive director and chief financial officer Madhav Acharya; director B. Hariharan; non-executive director Omkar Goswami; and then chief financial officer Venkatesh Rammoorthy.

It is alleged that they indulged in diversion and siphoning of funds through sham transactions with related parties. The accused borrowed funds by misrepresentation, falsified books of accounts, entries, vouchers and financial statements, and furnished incorrect or misleading information.

According to the FIR, during August 2019, the company’s board disclosed to the Securities and Exchange Board of India about several suspicious unauthorized transactions, including previously undisclosed debts. The liabilities of the company and the group had apparently been understated.

Advances to the related/unrelated parties were also suspected to have been understated by ₹1,990.36 crore and ₹2,806.63 crore, respectively, as on March 31, 2018.

The FIR lists 19 major instances of suspected siphoning and diversion of funds, which include non-disclosure of unauthorized transactions in the nature of loans taken from banks/financial institutions and connected party aggregating to ₹635 crore.

As alleged, ₹634 crore written off in the prior years was misrepresented to the board, and post-dated cheques and comfort letters issued by the senior management in relation to certain borrowings from some related parties were not recorded. In the restated financial statement, ₹303.45 crore amount has wrongly restated in the name of Avantha Holdings Limited and Servomax Infratel Private Limited.

Some transactions with the Diwan Housing Finance Limited Pramerica Asset Managers Private Limited have also been mentioned in the FIR registered on Tuesday.