The debt resolution process of SKS Power Generation (Chhattisgarh), currently under administration, faces a setback as the Allahabad High Court has directed the Central Bureau of Investigation (CBI) to investigate charges of misappropriation and financial misconduct against the company and its associated entities.
In its order dated March 19, the Allahabad High Court ordered an inquiry into SKS Power Generation (SKSPGL) and its affiliates for allegedly transferring funds to the British Virgin Islands and Bermuda through fictitious companies. These funds were purportedly used to acquire SKSPGL’s assets in collaboration with bank officials, allegedly violating central bank guidelines. Additionally, the Serious Fraud Investigation Office (SFIO) has been directed to conduct forensic audits.
The court’s decision stemmed from a petition filed by a teacher and social worker alleging fraudulent activities by SKS Power Generation and its affiliates.
Torrent Power and Sharda Energy and Power are vying to acquire the 600 MW power generation company. However, the process faces contention, with Torrent Power claiming to have made a higher offer and criticizing the sale process.
The matter is currently under consideration at the National Company Law Appellate Tribunal (NCLAT). Bank of Baroda and the State Bank of India (SBI) have filed claims totaling ₹1,890 crore against the power generating company.
The court justified transferring the case to the CBI, citing bias and inadequate investigation by local authorities in uncovering financial fraud.
According to the order, SKS Power Generation availed loans amounting to ₹6,170 crore from various lenders between 2010-11 and 2017-18. Following default, SBI seized the assets and sold the company to Agritrade Resources. Allegations include Agritrade Resources acquiring shares at a significantly reduced price, with the bank allegedly waiving interest on the loan, resulting in a substantial loss.
The order further highlighted the involvement of fictitious companies, allegedly established by SKS group entities’ directors, engaging in fund round-tripping through bogus share transactions, leading to significant profits for SKS Power Generation group companies.
