CBI books GVK Group in `805 crore corruption case

The GVK Group and Adani Properties are currently locked in a fierce corporate battle over acquiring a major stake in the JVC that runs the Mumbai Airport

NEW DELHI: Locked in a fierce legal battle with Adani Properties over acquiring a 13.5 per cent stake in the Joint Venture Company that runs Mumbai International Airport Limited, GVK Group has now suddenly been booked by the CBI in an alleged corruption case involving the misappropriation of over Rs 805 crore.

Significantly, in 2015, it was reported that a similar enquiry was started by the CBI against GMR of the Delhi International Airport Limited JVC, which till at least 2019 has not been converted into an FIR.

However, while the GMR probe was initiated as a Preliminary Enquiry, the agency's first step to check whether a prima facie case is made out to register an FIR, the case against GVK has been registered on the basis of what the agency has called "detailed information" provided by a source in the form of a complaint.

According to the agency's FIR, which names GVK Group and MIAL chairman GVK Reddy, his son GVS Reddy (MD of MIAL) and MIAL, company officials had allegedly conspired with unknown officials of AAI to execute bogus work contracts, misuse reserves and surplus, inflate expenditures and underreport revenues to cause wrongful loss of over Rs 805 crore to the public exchequer between 2012 and 2018. Sources here said that the agency had also conducted searches at several official premises of the accused in Mumbai and Hyderabad, including offices of MIAL and GVK Group offices on Wednesday.

The agency has alleged that at least Rs 310 crore was siphoned off by MIAL into the accounts of nine companies by entering into "fake or bogus work contracts during 2017-2018" with relation to the monetisation of 200 acres of land allotted to the MIAL by AAI. The CBI has alleged that these "contracts have never been executed on ground and the transactions were only on papers". All nine of these have also been named in the FIR.

Besides, the federal agency has accused GVK Group promoters of misusing around Rs 395 crore of MIAL'S reserves by opening FDRS with PSUS in Hyderabad which were allegedly used by the company to raise loans and OD facilities for their group companies "at the expense of MIAL".

Moreover, the agency has alleged that more than Rs 100 crore was "embezzled" by allegedly inflating MIAL expenditures.

Interestingly, Adani Properties had faced a major roadblock in their bid to acquire the 13.5 per cent stake in MIAL from Bid Services Division (Mauritius) when an arbitration tribunal restrained Bidvest from in any way selling the stake to anyone in January after the Supreme Court had directed the tribunal to decide the matter.

Meanwhile, GVK had also told the Bombay High Court that it had already deposited Rs 1,250 crore in an escrow account to show its serious intent to purchase Bidvest's stake.

The spokesperson for Mumbai International Airport Ltd (MIAL) said, “MIAL is surprised to note the registration of case by CBI against MIAL and others.

MIAL would have provided every assistance had the agency sought explanation or any document even if a preliminary enquiry had been initiated.

MIAL is a transparent and responsible corporate entity which is committed to cooperate with the agency in its investigation to arrive at the truth”.