CBI books Corporate Power Limited and others for alleged ₹4,037.87-crore bank fraud  

The agency has conducted searches on 16 premises in Nagpur, Mumbai, Ranchi, Kolkata, Durgapur, Ghaziabad, Vishakhapatnam and other places.

The Central Bureau of Investigation (CBI) has registered a case against Kolkata-based Corporate Power Limited and 12 others, including the promoters, for allegedly cheating a consortium of 20 banks to the tune of ₹4,037.87 crore.

The agency has conducted searches on 16 premises in Nagpur, Mumbai, Ranchi, Kolkata, Durgapur, Ghaziabad, Vishakhapatnam and other places.

According to the CBI, from 2009 to 2013, the company had submitted manipulated project cost statements and also diverted the bank funds. It was also alleged that the trade receivables, mainly including transactions to related parties and funds, were diverted to a web of various entities which were dummy accounts.

The lead lender, the Union Bank of India, had declared the account as a Non-Performing Asset in September 2013 and subsequently, the other consortium members also took the same decision. The accounts of the borrower company was declared a fraud in October 2019.

The company had originally envisaged to set up a coal based power plant of 540 megawatt (MW). The total cost of the project was estimated at ₹2,900 crore which was to be funded by way of equity contribution of ₹725 crore, senior debt of ₹2,030 crore and subordinate debt of ₹145 crore at a debt equity ration of 3:1.

Initially, the company had appointed SEPCO-I as their Engineering, Procurement and Construction (EPC) contractor for the project. In view of non-availability of visa for Chinese workmen, the company decided to cancel the contract and offer the contract to Abhijeet Infra Limited. The Boiler Turbine and Generator project was awarded to BHEL.

The First Information Report stated that the coal blocks allotted to Corporate Ispat Alloys Limited was cancelled in 2014, which led to non-availability of supply of raw material to Corporate Power Limited. Originally, land of 768.45 acre was to be acquired, but the actual acquisition was 327.55 acre. Against the standard cost of ₹5.09 croreMW for green field project of 500MW actual cast incurred was ₹9.35 crore perMW.