The CBI has booked Chennai-based Surana Power Limited (SPL) and its senior functionaries for allegedly cheating 10 banks of ₹1,495.76 crore. The outstanding amount as on July 31 this year stood at ₹3,157.82 crore.
Among those named in the FIR are Gautham Raj Surana, Shantilal Surana, Vijayraj Surana and Dinesh Chand Surana. Unknown bank officials are also under the scanner.
Misappropriation, criminal breach of trust
The case has been registered on a complaint lodged by the IDBI Bank, on behalf of nine other lender banks. The bank alleged misappropriation, criminal breach of trust, manipulation of books of accounts through fictitious accounts and conversion of property.
According to the FIR, the fraud came to light from a forensic audit report received by the Resolution Professional as part of the Corporate Insolvency Resolution process in Chennai.
The company had set up a 35-MW coal-based power plant for meeting the captive requirements of its steel plant and then hived off this power plant, along with a 50-MVA sub-station, in favour of the SPL for a consideration of ₹225 crore. The objective was to operate the entire power business of the group through SPL, said the FIR.
The SPL proposed setting up of 420-MW coal-based thermal power plant at Vadlur village in Karnataka’s Raichur, adjacent to its existing steel plant. In July 2009, it approached the IDBI Bank seeking an appraisal of its project for 455-MW coal-based thermal power plant at Raichur and syndication of term loan for part-financing of the project.
The cost of the project was originally estimated at ₹2,400 crore to be funded in debt and equity in 3:1 ratio. The IDBI Bank syndicated the term loan with other lenders and term loans totalling ₹1,940 crore were sanctioned. However, as the required limit was only ₹1,800 crore, the sanctioned amount was brought down.
Term loans disbursed
Term loans of ₹1,495.76 crore were disbursed by lenders in eight tranches from November 2010 to April 2015. The project was expected to become commercially operational by April 2013, but got stalled in November 2013.
In February 2018, the SPL was admitted into the National Company Law Tribunal, following an application by one of the creditors over non-payment of dues.
The bank alleged that there was a possible overstatement of value of the 35-MW power plant, manipulation in the award of contracts, diversion of funds via round-tripping, accounting manipulations and acceptance of third-party liability, according to the FIR.