Another insolvent firm found involved in bank fraud; CBI charges Transstroy (India), CMD for Rs 7926-cr loan fraud

The Central Bureau of Investigation (CBI) has registered a case against Hyderabad-based Transstroy (India) Ltd and its directors for committing bank fraud to the tune of Rs 7926 crore.

FIRs have been filed against the company, its chairman and managing director Cherukuri Sridhar, additional directors Rayapati Sambasiva Rao and Akkineni Satish, Additional Director, and unknown public servants.

Transstroy (India), an infrastructure company with interests in roads and highways, irrigation, power and oil & gas, is undergoing liquidation process after an order by Amravati branch of NCLT on September 2019.

The FIR has alleged that the Hyderabad-based company and its directors had availed credit facilities on multiple banking arrangements. A consortium of banks, led by Canara Bank, had extended loans to the company. It is alleged that the accused had involved in falsification/fabrication of books of accounts, fudging of stock statements, tampering of balance sheets, round tripping of funds etc. It is also alleged that the accused misappropriated bank’s funds and diverted the loan amount sanctioned by the banks and caused loss of Rs. 7926 crore to Canara Bank and other member banks. The account had become NPA and the bank fraud was reported. 

Searches were conducted at the premises of private company/other accused at Hyderabad and Guntur, which led to recovery of incriminating documents.

The Corporate Insolvency Resolution Process (CIRP) against the company was initiated by the Canara Bank in October 2018.

During the CIRP, only one resolution applicant – Asset Care and Reconstruction Enterprises Ltd — had submitted a resolution plan which was rejected by the committee of creditors. The company owed a total of Rs 8629 crore to the creditors.