The CBI on Friday filed a case against Telugu Desam Party (TDP) MLC Vakati Narayan Reddy for allegedly cheating the Industrial Finance Corporation of India (IFCI) Ltd – a government-owned development bank – to the tune of Rs 205 crore.
The investigation agency then raided Reddy’s residence at Vedayapalem, besides his offices in Hyderabad, Bengaluru and Nellore.
According to CBI sources, a case was registered against Reddy and seven firms owned by him, besides unknown public servants, for fraud and misrepresentation of facts under various sections of the Indian Penal Code and Prevention of Corruption Act.
The CBI found that one of Reddy’s firms – VNR Infrastructure Limited – had received loans to the tune of Rs 190 crore for the purpose of executing several projects in 2014-2015. However, the security provided for the loans were immovable objects valued at highly inflated rates.
The MLC failed to repay the loans, thereby causing a loss of Rs 205.02 crore to IFCI Ltd.
Reddy is a popular industrialist-turned-politician, and the founder-chairman of the VNR Group of organisations in Nellore. He launched his political career with the Congress, but defected to the TDP in 2014 after an electoral defeat.
A contractor registered with Indian Railways, Reddy runs various companies – including VNR Constructions, VNR Infrastructure and VNR Logistics. Sources said he is also accused of defaulting on loans taken from many other banks, including the State Bank of India, Bank of Baroda and Indian Overseas Bank.