The Central Bureau of Investigation has registered a case against Ranchi Expressway Limited, its chairman-cum-managing director K. Srinivasa Rao and others for alleged irregularities in the use of ₹1,029 crore of funds borrowed from a consortium of banks led by Canara Bank. A sum of ₹264 crore was allegedly diverted on various pretexts.
Among those named in the case are the company directors N. Seethaiah and N. Prithvi Teja; Madhucon Project Limited, Madhucon Infra, Madhucon Toll Highway Limited and auditing firm “Kota and Company.” Unknown bank officials are also under the scanner.
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The case has been registered following a preliminary inquiry ordered by the Jharkhand High Court. It relates to a project for four-laning of a 163-km stretch on National Highway-33 linking Ranchi to Jamshedpur. The National Highways Authority of India had allocated the work to Madhucon Project Ltd on March 18, 2011.
A special purpose vehicle, Ranchi Expressway, was floated for the project worth ₹1,655 crore. A consortium of 15 banks agreed to lend ₹1151.60 crore. The Ranchi Expressway office-bearers round-tripped ₹50 crore, diverted ₹22 crore, claimed ₹98 crore as maintenance and used ₹94 crore as mobilisation advance, as alleged by the Serious Fraud Investigation Office.
It is alleged that the directors had fraudulently got released a total loan of ₹1,029.39 crore, but there was no progress in the project.
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The National Highways Authority of India terminated the contract on January 31, 2019, and forfeited ₹73.95 crore.