Three solar power companies booked for duping city firm of ₹131 Cr
MUMBAI: The Economic Offences Wing (EOW) of the Mumbai police on Thursday registered a case against the chairman, directors and senior functionaries of three solar power generation companies for allegedly duping a Chembur-based company to the tune of ₹131 crore
MUMBAI: The Economic Offences Wing (EOW) of the Mumbai police on Thursday registered a case against the chairman, directors and senior functionaries of three solar power generation companies for allegedly duping a Chembur-based company to the tune of ₹131 crore. The accused companies in 2017 gave the contract of two solar power projects in Ballari, Karnataka to the complainant, but did not pay them fully causing them a huge loss.
The EOW has booked Embassy Energy Pvt Ltd. (EEPL) chairman Jitendra Virwani, then director Karan Jitendra Virwani, IL&FS Energy Development Company Ltd (IEDCL) and IL&FS Solar Power Limited (ISPL) companies’ then director and COO Keshav Prasad under sections 406 (criminal breach of trust), 409 (criminal breach of trust by public servant, or banker, or merchant or agent), 420 (cheating), and 120 B (criminal conspiracy) of Indian Penal Code.
The FIR is based on a complaint filed by Venkata Jagannath Rao, 60, legal head and company secretary of Sterling & Wilson Renewable Energy Ltd. (SWREL), formerly known as Sterling & Wilson Private Ltd.
SWREL is into solar engineering, procurement, and construction (EPC) and provides end-to-end services and has an office on PL Lokhande Marg in Chembur.
In 2015, EEPL approached SWREL for setting up two solar projects in Ballari district and requested them to send proposals for the same. SWREL sent a techno-commercial offer to EEPL, but as the latter needed finance from its reference, IL&FS Solar Power Limited (ISPL) and IL&FS Energy Development Company Ltd (IEDCL), contacted SWREL for financing the project. After the site survey, in November 2016, the IEDCL sent a Letter of Award (LoA) to SWREL.
As per the police complaint, a total of ₹564.54 crore was spent on the project and SWREL received ₹472.09 from IEDCL and the remaining ₹92.45 crore was outstanding. Due to non-payment of balance amount, SWREL suspended the work on the project in 2018.
In October 2018, the National Company Law Appellat Tribunal (NCLAT) imposed a moratorium on the IL&FS group, directing registration of criminal offences against the group’s 348 companies and restricting all their activities.
EEPL then wrote to SWREL requesting them to resume work on the project and assured them that they would pay them the balance amount if IEDCL fails to pay them. As per the police complaint, EEPL wanted the project to be completed at any cost so that Embassy Office Parks REIT could launch the company in the market and start an Initial Public Offering (IPO) and collect money from the market.
The complainant claimed that based on their project the accused company did business and has been allegedly earning more than ₹140 crore every year since 2018. SWREL completed the project, but never received the outstanding amount. As per the FIR, EEPL owes the complainant company a total of ₹131.57crore ( ₹92.45 crore outstanding amount and ₹39.12 crore towards interest) and caused wrongful loss.
Terming the allegations false and baseless, an Embassy REIT spokesperson said, “We deny these allegations made by the complainant. Pre-listing, EEPL entered into contractual arrangements for the solar project with certain entities of IL&FS group and we have made full payments due under the contract.
“The vendor claiming to have not been paid was actually appointed by certain group companies of IL&FS and not by EEPL. Additionally, the matter is subjudice and we would not like to comment further on such baseless allegations.”
Sources in know of the matter claimed that SWPL (the complainant) approached the NCLT to institute IBC proceedings against EEPL. The NCLT has dismissed the petition and SWPL has preferred an appeal against the dismissal before the NCLAT. The matter is pending.