Mumbai airport scam: CBI carries out searches at GVK group premises in Mumbai, Hyderabad

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Published: July 2, 2020 4:59 PM

The Centra Bureau of Investigation (CBI) has booked Gunupati, a director in MIAL, his son GV Sanjay Reddy, managing director in MIAL, the companies MIAL, GVK Airport Holdings Limited (a GVK group company) and nine other private companies allegedly used to camouflage the inflated figures through sham deals and unidentified AAI officials, they added.

On April 4, 2006, the AAI entered into an agreement with MIAL for the modernisation, upkeep, operation and maintenance of the Mumbai airport.

The CBI has carried out searches at the offices of the GVK group in Mumbai and Hyderabad after registering a case against its chairman, Venkata Krishna Reddy Gunupati, in connection with alleged irregularities to the tune of Rs 705 crore in the running of the Mumbai airport, officials said.

The agency operation was conducted on Wednesday and continued till late in the evening, they added. The case pertains to the alleged siphoning off Rs 705 crore from the funds of MIAL, a joint venture under public-private partnership (PPP) between the GVK Airport Holdings Limited and the Airports Authority of India (AAI) besides other investors, by showing inflated expenditure, under-reporting of revenues, fudging of records among others, the officials said.

The Centra Bureau of Investigation (CBI) has booked Gunupati, a director in MIAL, his son GV Sanjay Reddy, managing director in MIAL, the companies MIAL, GVK Airport Holdings Limited (a GVK group company) and nine other private companies allegedly used to camouflage the inflated figures through sham deals and unidentified AAI officials, they added.

The AAI had formed a joint venture with GVK Airports Holdings Limited under public-private partnership firm Mumbai International Airport Limited (MIAL) for the upgradation and maintenance of the Mumbai airport.
On April 4, 2006, the AAI entered into an agreement with MIAL for the modernisation, upkeep, operation and maintenance of the Mumbai airport.

It is alleged that the promoters of the GVK group in MIAL, in connivance with their executives and unidentified AAI officials, resorted to siphoning off funds using different ways, the officials said on Wednesday.
The agency has alleged that they siphoned off funds showing execution of bogus work contracts to nine companies in 2017-18, causing a loss of Rs 310 crore.

The promoters of the GVK group allegedly misused the reserve funds of MIAL to the tune of Rs 395 crore to finance their group companies, the CBI has alleged. The agency has alleged that the group inflated the expenditure figures of MIAL by showing payments to employees at their headquarters and group companies, who were not involved in the running of MIAL, causing a revenue loss to AAI.

In the complaint, the inflated expenditure figures are pegged at Rs 100 crore, which may take the total sum involved in the alleged scam to Rs 805 crore, but this has not been included in the FIR by the CBI. The agency has attached the complaint to the FIR and the figures of the alleged scam may increase during the probe, the officials said.

The promoters allegedly under-reported the revenue earnings of MIAL by entering into contracts with related parties and meeting their personal and family expenses using MIAL funds, they said.

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