Firm Loots Rs.1000 Crore From Banks For Developing Ranchi Expressway, CBI Files FIR

The Central Bureau of Investigation (CBI) booked management of the Ranchi Expressway Ltd, including its CMD K Srinivasa Rao, for causing a loss of over INR₹ 1,000 crore to a consortium of banks led by Canara Bank.

The CBI filed an FIR against the Ranchi Expressway Ltd CMD K Srinivasa Rao, its directors N Seethaiah, N Prithvi Teja and the company itself. The CBI when ahead to charge the Madhucon Project Ltd, Madhucon Infra, Madhucon Toll Highway Ltd and auditing firm Kota and company.

163 kilometer stretch of the National Highway 33 (NH-33) that connects Ranchi with Jamshedpur which the National Highways Authority of India contract was given to  Madhucon Project Ltd.

The entire project estimated at INR₹ 1,655 crore, 15 banks led by Canara bank agreed to fund INR₹ 1151.6 crore. The remaining contribution of INR₹ 503.6 crore was made by the promoters of the company.

The promoter-directors of Ranchi Expressway K Srinivasa Rao, N Seethaiah and N Prithvi Teja round tripped INR₹ 50 crore, diverted INR₹ 22 crore, claimed INR₹ 98 crore as maintenance and used INR ₹94 crore as mobilisation advance totalling to about INR₹ 264.01 crore, according to an SFIO report.

It’s alleged that the director of the company did fraudulent acts to get the loan released by the consortium of banks, but no progress was made on the project and the loan ended up becoming a non-performing asset.

In January 2019, the National Highways Authority of India terminated its contract with the company and forfeited INR₹ 73.95 crore by way of encashment of the performance bank guarantee with Canara Bank.