The Central Bureau of Investigation has booked YSR Congress Party MP Raghu Ramakrishna Raju, his wife and nine others in connection with an alleged loan default case worth Rs 826-crore in a Punjab National Bank-led consortium of banks by Ind-Barath Thermal Power Limited, PTI reported on Thursday.

Raju, who represents the Narsapuram Lok Sabha constituency in Andhra Pradesh, and his wife Kanumuru Rama Devi are directors of Ind-Barath Thermal Power Limited.

The investigating agency on Thursday carried out searches at about 11 locations in Mumbai, Hyderabad and the West Godavari district in Andhra Pradesh, the officials said. It has registered a case under the Indian Penal Code sections of cheating and criminal conspiracy and also under the Prevention of Corruption Act.

“It was alleged in the complaint that the accused had cheated the Punjab National Bank-led consortium of banks by way of diversion/siphoning off bank funds etc,” CBI spokesperson RK Gaur said.

The raids came amid a tussle between Raju and the YSR Congress led by Andhra Pradesh Chief Minister YS Jagan Mohan Reddy, according to the Hindustan Times. In July, the YSR Congress had sought Raju’s disqualification from his membership for defying the party discipline. The Narsapuram MP had challenged a show-cause notice served to him and has been attacking the party leadership almost every day since then.

The CBI had conducted another series of raids in April 2019 at the residences and offices of Raju for an alleged loan default of over Rs 947 crore. The investigating agency had charged Raju’s company for taking Rs 2,655-crore in loans from three non-banking financial companies.

The case relating to the Rs 826-crore loan default was registered on the basis of a first information report filed by the Punjab National Bank that alleged the company had committed fraud during 2014-’18. It had siphoned off public funds by diversion issued to the company for setting up a 300 MW power plant in Uttara Kannada district, the officials said, citing the police complaint. The project was shifted to Tuticorin in Tamil Nadu because of environmental issues, they said.

The members of the 10-bank consortium had declared accounts fraudulent between 2019-’20, the police complaint said. The bank alleged that the company made payments of Rs 267 core to related parties between 2014-’18, instead of paying debts to the lender. The company also transferred Rs 41 crore in receivables to the parties, the lender alleged.

Further, it did not submit any documents or issued a justification for transferring this over Rs 300 crore working capital loans to related parties, the CBI officials said, adding that the bank has alleged the diversion was in violation of Reserve Bank of India guidelines.

The bank also said the company showed the value of the entire coal inventory reduced to Rs 2.76 crore on March 31, 2018, from Rs 249.67 crore on March 31, 2017. The board minutes record show that the coal inventory’s value was impaired as it was old and unable to use due to sustained deterioration.

However, the bank claimed that the reason was not justified as it was unlikely that such a huge amount of coal could deteriorate within a year. Further, the lender alleged that the company has not provided documents for physical verification of inventory during 2016-’17 and 2017-’18.

“It is clear that the connivance with each other or any other person have indulged into diversion of funds, siphoning of funds to detriment of bank with a view to criminal misappropriation and commit fraud upon the bank causing wrongful gain to themselves and wrongful loss to the lenders to the tune of Book outstanding for Rs 826.17 crore as on October 31, 2019 and interest thereon from the NPA date of respective banks.”  

— Punjab National Bank