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CBI case against GVK Group chairman, son for siphoning off Rs 705 crore from Mumbai airport

The CBI has registered a case against GVK Group chairman GVK Reddy and his son GV Sanjay Reddy.

July 02, 2020 / 01:12 PM IST

The Central Bureau of Investigation (CBI) has registered a case against GVK Group Chairman GVK Reddy and his son GV Sanjay Reddy for siphoning off Rs 705 crore from Mumbai International Airport (MIAL), PTI reported.

GV Sanjay Reddy is the Vice Chairman of GVK Group and the Managing Director of MIAL. GVK Reddy is a director on the board of MIAL.

MIAL is a joint venture between GVK Group, Airports Authority of India (AAI), and a few foreign companies.

According to the the agreement signed in 2006, MIAL should share 38.7 percent of its revenue with the AAI as annual fees. MIAL's balance earnings are supposed to be utilised for modernisation, operation and maintenance of the Mumbai airport.

Promoters of GVK group in MIAL in connivance with their executives and unidentified officials of AAI siphoned off the funds using various means, the FIR said.

The FIR alleges that the funds were siphoned off using bogus work contracts, misusing surplus funds of MIAL, inflating the company's expenses, and under-reporting revenue.

In 2017-18, MIAL entered into bogus work contracts to nine companies, causing a loss of Rs 310 crore to AAI.

From 2012, GVK Group allegedly misused reserve funds of MIAL to the tune of Rs 395 crore to finance their group companies, the FIR said.

The GVK Group also used MIAL's surplus funds by entering into agreements with a company owned by family members, relatives, employees to book train, air travel tickets and hotel bookings for personal as well as group employees of GVK who were not connected to MIAL.

The Enforcement Directorate (ED) may charge promoters of the GVK Group  for alleged money laundering, according to a Business Standard reported.

Moneycontrol News
first published: Jul 2, 2020 07:33 am