The Serious Fraud Investigation Office (SFIO) in Hyderabad has initiated an investigation into Transstroy India Private Ltd for alleged violations of the Companies Act. The probe is linked to a multi-crore loan fraud already being investigated by the Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED). Transstroy India is accused of a ₹9,394 crore loan fraud, with the CBI and ED pursuing parallel cases. The company allegedly secured loans from a consortium of 14 banks, led by Canara Bank, and diverted around ₹6,643 crore through shell companies and entities.
The CBI’s Bengaluru unit had initially registered a First Information Report (FIR) against Transstroy India for criminal conspiracy, cheating, forgery, and other offenses. The ED later registered a money laundering case based on the CBI’s FIR and attached properties belonging to the company and its associates. A forensic audit revealed that Transstroy India had floated shell firms in the names of domestic workers, sweepers, and drivers, listing them as directors to reroute funds.
The SFIO’s probe will focus on company law contraventions linked to the loan fraud and will extend its investigation to cover all entities involved, including Padmavati Enterprises, Unique Engineers, Balaji Enterprises, and Ruthwik Associates. Transstroy India was founded in 2001 and took up various civil works, including roads, bridges, tunnels, and highways. The company was also the original contractor for the Polavaram Irrigation Project in Andhra Pradesh.
The loans under scrutiny were availed between 2013 and 2014 from a consortium of banks, including Canara Bank, Central Bank of India, and Corporation Bank. Following mounting defaults, the consortium of lenders authorized Canara Bank to initiate insolvency proceedings before the National Company Law Tribunal (NCLT) in March 2017. The Hyderabad bench of the NCLT admitted the case on October 10, 2018. The SFIO’s investigation is expected to uncover more details about the alleged loan fraud and company law violations by Transstroy India.