The board of Mumbai Airport International Limited (MIAL) has asked its audit committee to take legal advice on the future course of action in the matter related to the FIR registered by the Central Bureau of Investigation (CBI).

The investigating agency has filed an FIR against MIAL, its MD Sanjay Reddy, its holding company, GVK Group, and its promoter, GVK Reddy, along with eight other people for alleged financial and other irregularities.

While sources at Airports Authority of India told BusinessLine that the board members at MIAL had recommended an internal audit regarding the allegations, a MIAL spokesperson said that “the board of MIAL decided that the audit committee be entrusted with the task of taking legal advice on this matter and decide the next course of action ”.

Bogus contracts

The FIR lodged by the CBI claimed that GVK Airports Holding’s alleged modus operandi to siphon off ₹705 crore was to allot bogus contracts, underreport revenues, misuse reserves for the holding company, allowing premium retail spaces to family and relatives at lower rates, booking exuberantly expensive air and train travel for employees and family of those close to GVK Holding, among others.

Simultaneously, the Enforcement Directorate (ED) has filed a preliminary money-laundering case against the said accused to investigate the alleged financial irregularities.

While sources at CBI said that the officials of MIAL and other contractors have been summoned to investigation multiple times over the past fortnight, the promoters haven’t been summoned yet. ED officials said that the documents raided from GVK’s Mumbai and Hyderabad premises are being vetted.

BusinessLine had reported that the AAI had written a letter to MIAL seeking clarity on the said FIR. However, according to AAI sources, MIAL said it was unable to provide any details requested by AAI because the CBI and ED authorities have taken the documents. However, GVK is completely cooperating with the investigating authorities. Nonetheless, once the documents are returned to GVK, the company will respond.

Published on July 23, 2020