Nellore: A team of CBI officers conducted searches at the house of AP MLC Vakati Narayana Reddy, in Nellore, for over nine hours, from 7.45 am on Friday.
The CBI has registered a case on the complaint of IFCI Ltd (Industrial Finance Corporation of India) against one of Mr Reddy's firms based in Banjara Hills, Hyderabad, and against its managing director, Mr Narayana Reddy, a director and the chief finance officer.
The CBI also included five other companies of the MLC based in Hyderabad and Pune, and unidentified public servants and others.
The charges relate to fraud, misrepresentation and cheating perpetrated by the private firm Banjara Hills, Hyderabad.
IFCI has alleged that the firm applied for loans for to execute certain projects in 2014-2015. The loan of Rs 190 crore was against security in the form of immovable property whose value was allegedly highly inflated with malafide intention, and the loan was not repaid causing losses of Rs 205.02 crore to IFCI Ltd.
According to a CBI press release, searches were being conducted on Friday at the premises of Mr Reddy in Hyderabad and Bengaluru as well.
Sources close to Mr Reddy said that the CBI team elicited information on the value of his properties. The officials themselves declined to share any details of the outcome of the search.
Speaking to mediapersons, the MLC said he cooperated with the CBI and gave all the information they sought with respect to his business and bank dealings. He denied that raids were also conducted in his homes at Bangalore and Hyderabad.
Several banks had advertised in newspapers regarding taking over the properties of Mr Narayana Reddy in January this year.
The banks had claimed then that Mr Reddy's companies had borrowed Rs 203.09 crore from the State Bank of India, Rs 55.42 crore from SBH, Rs 73.09 crore from Bank of Baroda and Rs 111.67 crore from Indian Overseas Bank.
They said that they had sent notices in August 2016 to seize the properties in lieu of the unpaid loans to the extent of Rs 443.27 crore.
The company's representatives, led by Mr Reddy, had appealed to the banks to restructure the loans in view of the large difference between the value of the properties and the amount of the loans and sought time to go for a public issue to repay the loans.
They had also approached the National Company Law Tribunal, which was established by the centre in 2016, for restructuring the companies.
Two of the firms, VNR Infrastructure and VNR Logistics, are involved mostly in executing railway projects.
