CBI books case against Hyderabad-based GVK group chairman and son

The duo siphoned off Rs 705 crore meant for development of the Mumbai International Airport, says CBI

By Author  |  Published: 2nd Jul 2020  10:16 amUpdated: 2nd Jul 2020  9:26 pm
GVK

Hyderabad: The Mumbai unit of the Central Bureau of Investigation (CBI) has booked a case against the Hyderabad-based GVK group’s Chairman G Venkata Krishna Reddy and his son G Venkata Sanjay Reddy on charges of siphoning off Rs 705 crore meant for development of the Mumbai International Airport.

The case of conspiracy and cheating was booked against nine other companies along with GVK Airport Holdings Limited and Mumbai International Airport Limited (MIAL) for showing bogus bills, CBI officials said. Krishna Reddy is the whole-time director of MIAL and Sanjay Reddy is the managing director.

The CBI said in its FIR that it was “informed by reliable sources” that the GVK group, in connivance with other companies, had committed fraud and caused heavy loses to the State exchequer. In 2006, the Airports Authority of India (AAI) had entered into an Operation, Management and Development Agreement (OMDA) with MIAL for upgradation and maintenance of the Mumbai airport.

As per the agreement, the Mumbai airport should be run by MIAL and they were to share 38.7 per cent of their revenue as annual fee with AAI. The OMDA clearly states that the revenue share has to be given first to AAI and the balance earnings of MIAL should be used for modernisation, upgradation, operation and maintenance of the airport.

However, the promoters of GVK Group in MIAL in connivance with their executives and unknown officials of AAI resorted to siphoning off funds, the CBI alleges in its FIR.
The CBI also said that around 200 acres of underdeveloped land parcels in Mumbai, located around the airport was given to MIAL by AAI for development and revenue generation. The MIAL entered into a “bogus work contract” during 2017-18 with nine companies on the pretext of real-estate development.

MIAL transferred the funds to them but these contracts have never been executed on ground. Using this modus operandi, Rs 310 crore have been siphoned off. The nine companies have availed fake input tax credit (ITC), the CBI said, adding that from 2012 onwards, the GVK group used surplus funds of MIAL to a tune of Rs 395 crore to finance their own group of companies.
The group also allegedly forged a board meeting resolution with MIAL authorizing to keep the reserve as FDRs with PSU banks in Hyderabad, the FIR added.

 


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