Ind-Bharath Power – Waiting for Another Banking Fraud to Happen

1. Mr. K. R. Rama Krishna Raju, who is the Chairman of the Ind-Bharath Group, is
also the richest M.P. of the state. Mr. Raju has also been known as the jumping
jack of politics or an opportunist in real terms. The industrialist-cum-politician
was the convenor of Narsapuram Parliamentary constituency in TDP till March,
2019. He was working for BJP till April, 2018. In less than a year, Mr. Raju has
ventured into three political parties.

2. Mr. K. R. Rama Krishna Raju like Mr. Vijay Mallaya who has already been declared
as the first fugitive under the Fugitive Economic Offenders Act, 2018, , has
ammased huge loans from banks, financial institutions, suppliers etc. in the name
of the companies which he runs and/or has substantial investments.

3. As has been the fate of other fradulent companies where loan/credit has been
taken and the capital of the company has eroded and thaey face lack of
funds/assets etc. whereas the promotors remain rich. Mr. K. R. Rama Krishna
Raju’s personal wealth has kept increasing and he has declared his personal
wealth/asstes to the tune of Rs. 325 crores in the declaration in his affidavits
submitted with the Returning Officer of the Election Commission, filled by him for
contesting 2019 Lok Sabha elections. Whereas his companies have reported to
be defaulting to the tune of over Rs. 3000 crores.

4. This goes to show that the power and might of Mr. K. R. Rama Krishna Raju like
the other big defaulters has protected him and his companies from any
substanitive action be taken against him and his companies and the banks and
financial institutions are still waiting to take appropriate action against them
waiting for another disaster to happen.

5. There are allegations of misappropriation and siphoning of funds against the

sitting M.P. of the ruling party from Narsapuram (Andhra Pradesh)., Mr. Raju is
the master of money. His power projects although have failed, have made him
more rich.

6. CBI in recent months has registered an FIR against the company Ind-Bharath
Power Ltd., its directors Mr. K. R. Rama Krishna Raju, Madhusudan Reddy, and
their another group company Ind-Bharath Power Infra Ltd. and has carried out
searches at the offices and residences of Mr. Raju. It was alleged that the loans
were given to the Ind-Bharath Group to the tune of Rs. 2,655 crore by three Non-
Banking Financial Companies – Power Finance Corporation, Rural Electrification
Corporation Ltd. and India Infrastructure Finance Company ltd. The loans were
cleared for the Group’s 666 MW thermal power project to be developed in
Tuticorin, Tamil Nadu. A Trust and Retention Account (TRA) Agreement was also
executed on 23th February, 2011 between the borrowers and Power Finance
Corporation, Axis Bank, Punjab National Bank, South Indian bank, State Bank of
 Hyderabad, Indian Overseas Bank, Bank of Baroda and Andhra Bank. The lenders
have alleged that the group has defaulted in the payment of Rs. 947 crore which
turned into NPAs (non-performing assets). The FIR registered by the NBFC
lenders have also laid serious allegations on the Group’s Directors including its
Chairman Mr. Raju for misrepresentation, cheating, forgery, criminal breach of
trust and causing wrongful financial losses to them.

7. But that is not the only case against Ind-Bharath. There are serious allegations
against Ind-Bharath Group and its Chairman and directors. Ind-Bharath through
its Board and its Chairman have been accused of misappropriation and siphoning
of funds received from its lenders for a specific project diverting it to its group
companies.

8. Australian Asset Manager, Macquaire Infrastructure and Real Assets Fund, in

2015, had ventured Rs. 780 crore in an unlisted company Ind-Bharath Energy Ltd.
(Utkal) at a time when the power companies were failing to sustain their
revenues and finding it hard with their lenders. Macquaire invested in the Ind-
Bharath’s project of 700 MW thermal power in Odisha. The project is now stalled
and Macquaire has filed insolvency proceedings in the NCLT at Hyderabad against
the company. It is interesting to note that Macquaire now owns more than 99%
stake in Ind-Bharath Energy Ltd. (Utkal) after conversion of its bonds and debts
instruments into equity shares to regain control of the power plant. Macquaire
although has sought clarification from NCLT if it can file its petition as financial
creditor against the company. In later developments in the case, the petition of
insolvency against Ind-Bharath Energy Ltd. (Utkal) by Bank of Baroda and
Macquaire’s Indian arm MAIF Investment India Pvt. Ltd. was permitted and and
an IRP (Insolvency Resolution Professional) was appointed to proceed with the
Insolvency proceedings against the company under the Insolvency and
Bankruptcy Code, 2016. The company has also defaulted the payment of Rs. 167
crore to Bank of Baroda. NTPC is also considering acquiring it, according to
sources.

9. Mr. Raju’s journey doesn’t stop here. PSU Companies Power Finance Corporation
and Rural Electrification Corporation of India have accused Hyderabad based Ind-
Bharath Power (Madras) Ltd. of defrauding and siphoning-off Rs. 1000 crore of
public money. The PSU companies have alleged that the Ind-Bharath group
Chairman and its director Mr. Madhusudan Reddy diverted the funds disbursed
for a 660 MW power project in Tuticorin (Tamil Nadu). The PSU Companies have
also alleged that the accused persons and the Ind-Bharath group companies have
caused a loss to the consortium of banks to the tune of Rs. 947.71 crore which
has been declared NPA. This project is also stalled. The proceedings of insolvency
have also been intiated against the Ind-Bharath Power (Madras) Ltd. by its
 creditors and an IRP has already been appointed for the corporate debtor
company of the Ind-Bharath group.

10. There have been multiple rounds of litigation going on among the Ind-Bharath
group Companies Millenium Steel India Pvt. Ltd., and more than a dozen
Operational Creditors who have supplied Imported Coal to fuel its Power Plants
including prominent suppliers like Agarwal Coal Corporation Pvt Ltd., Gandhar Oil
Refinery (India) Pvt. Ltd, Millenium Steel India Pvt Ltd., Maheswari Brothers Coal
Ltd., Smartgen Infra Pvt Ltd., Swiss Singapore India Pvt Ltd., Trimex Industries Pvt
Ltd., to name a few, as well asM/s Black Burn Fuels Pvt. Ltd., Maheshwari
Brothers Coal Ltd., ADANI group, IL&FS, Axis Bank, TANGEDCO in the High Court
of Madras. There have been multiple civil suits been filed by Millenium Steel India
Pvt. Ltd. and M/s Black Burn Fuels Pvt. Ltd. sSome of the Operational Creditors in
the local civil courts in Hyderabad for Hundreds of Crores against the Ind-Bharath
group for recovery of due amount for non-payment of their supplies to the group
companies. The cases are still pending. The Ind-Bharath group has been accused
of non-payment and siphoning off funds among its group companies.

11. The Chairaman of the Ind-Bharath Group Mr. Raju has been accused of
defrauding and getting into an unholy alliance with TANGEDCO and IL&FS. There
are allegations against Mr. Raju of creating diverse interests for himself and his
companies and contesting on false claims before the High Court of Madras.
TANGEDCO has also been accused of diverting funds to the tune of over Rs. 47
crores to ADANI Group ignoring the orders of the High Court of Madras, thus
attempting to contempt of the orders of the High Court. The Operational
Creditors of the Ind-Bharath group, Millenium Steel India Pvt. Ltd. and its group
company M/s Black Burn Fuels Pvt. Ltd., have filed different civil recovery suits
against the Ind-Bharath group companies at Chennai and Hyderabad for the total
amount of over Rs. 133250 crores. The Ind-Bharath group has been accused of
delaying the payments and playing its delaying tactics to avoid or circumpass the
orders of the court. The Ind-Bharath group’s financial creditor IL&FS has also been
accused of obtaining fraud decrees against the Ind-Bharath group which liability
was admitted and not opposed by the Ind-Bharath group. The IL&FS now based
on its coullsive decrees claims over the amount already deposited in the court for
other creditors. There is no claim of IL&FS substantiated on legal grounds and
based on the agreement between IL&FS and Ind-Bharath. It is interesting to note
that the IL&FS has not claimed on the assets of the guarantor.

12. Mr. Raju, Chairman of the Ind-Bharath group, has also been accused by its
creditors of causing financial losses in various foreign exchange transactions. Mr.
Raju who is also behind the secret transactions of Rs. 100 crores from TANGEDCO
ignoring the interests of its creditors and withholding their payments. All the
actions of the Ind-Bharath group points fingers on its group Chairman Mr. K.R.
Rama Krishna Raju, for creating his own personal interests out of the borrowings
 from its creditors. It is also interesting to note that when an order has been
passed by NCLT, Hyderabad for appointment of IRP in his company, Mr. Raju has
appealed the order at NCLAT, Delhi in his personal capacity.

13. M/s Gandhar Oil Refinery (India) Pvt. Ltd. had also filed insolvency petitions
against two companies of Ind-Bharath Group viz. Ind-Bharath Thermal and Ind-
Bharath Power Gencom at NCLT, Hyderabad. In these petitions, IRPs (Insolvency
Resolution Professionals) were appointed. During IRP proceedings, it was
decided by the corporate debtor that it will appeal against the orders of the
NCLT, Hyderabad and the COC also decided to Mr. Raju has also settled the
matters amicably with some of its creditors by signing off MOUs for settlement
@55% of the prinicipal outstanding amount due. to the corporate debtor. These
MOUs were signed on 13th December, 2018 among the Ind-Bharath Group
companies and the creditors. The Ind-Bharath group companies have agreed in
this agreement of 13th December, 2018 to disburse the payment within 90 days Formatted: Superscript

of the MOU . Mr. Raju’s Group has again played a conspiracy against its company
creditors and till date no payment has been made by the Ind-Bharath group
companies. Mr. Raju, showing his ulterior motive, now has even denied making
payment unless his group gets an NOC from Axis Bank and IL&FS.

14. Despite the ill-motive and hindrances created by Mr. K.R. Rama Krishna Raju,
Group Chairman of Ind-Bharath Group, the creditors are putting their best efforts
in getting their money out & to get hold of the money deposited under orders of
the court. In regard to Ind-Bharath Thermal Power Limited, strong efforts by the
creditors are made for any recourse of settlement. The Star ETA has also
confirmed the requirements for bidding. All efforts are made to impound the
funds deposited with the High Court of Madras to its genuine creditors.

15.14. It is also feared by the creditors that Mr. K. R. Rama Krishna Raju, being a
MP and having connections with highly placed officials, will park his funds outside
India and may leave the country soon with the said funds. Thereby, leaving all the
creditors in lurch and thereafter compelling the creditors to initiate proceedings
against him under the Fugitive Economic Offenders Act. Hope the creditors will
get there money without resorting to such tactics and the authorities will initiate
appropriate action within the time frame so that it does not become another case
under the Fugitive Economic Offenders Act, 2018.