Finance:IVRCL loan fraud
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IVRCL loan fraud (also referred to as the IVRCL bank fraud case) was a major corporate banking fraud case in India involving Hyderabad-based infrastructure company IVRCL Limited. In December 2020, the Central Bureau of Investigation registered a case accusing the company, its Managing Director E. Sudhir Reddy, Joint Managing Director R. Balarami Reddy, and unknown public servants of defrauding a consortium of public sector banks of approximately ₹4,837 crore (about US$580 million as of 2020).[1]
Background
IVRCL Limited (full name: Iragavarapu Venkata Reddy Construction Limited) was an Indian public limited company listed on the National Stock Exchange of India and Bombay Stock Exchange. The company was founded in the late 1980s as an engineering, procurement, and construction contractor. It specialised in large-scale infrastructure projects, including irrigation, water and environment, roads and highways, power transmission, industrial infrastructure, and buildings.
By the mid-2010s, IVRCL had run into serious financial trouble, weighed down by project delays, rising costs, and growing debt—challenges that were common across India's infrastructure sector at the time. The situation worsened to the point that insolvency proceedings were initiated in February 2018. By July 2019, the National Company Law Tribunal in Hyderabad ordered the company's liquidation, handing control from the board to a court-appointed liquidator.[2][3]
At the time of the alleged fraud probe, the company had significant exposure to a consortium of public sector banks.[4]
Allegations
According to the first information report filed Central Bureau of Investigation, on the basis of a complaint by the State Bank of India, IVRCL and its executives allegedly cheated a consortium of banks that included SBI, Canara Bank, IDBI Bank, Punjab & Sind Bank, Andhra Bank, Corporation Bank, Exim Bank of India, and Union Bank of India.[5][4]
The company was accused of availing various credit facilities (loans and limits) but failing to repay them, causing a loss of ₹4,837 crore to the lenders. A forensic audit report commissioned by SBI reportedly found that IVRCL made payments to related parties through Letters of Credit (LCs) without recording corresponding purchase transactions in its books. Funds were allegedly routed back to the company's accounts, resulting in misappropriation of bank money.[6]
Further allegations, based on investigative reporting citing the probe, claimed that IVRCL floated around 60 shell or related companies and maintained multiple bank accounts (including 75 with SBI alone in some reports) to divert funds, possibly up to ₹7,000 crore (US$980 million) in total routed amounts. Collateral securities pledged to banks were allegedly undervalued in company records.[7]
The modus operandi reportedly involved diverting loan funds to group entities, subcontractors without actual project execution, and falsifying entries to show legitimate use of funds while projects stalled or faced termination risks.
Investigation
On 30 December 2020, the CBI registered the case under relevant sections of the Indian Penal Code for criminal conspiracy, cheating, forgery, and misappropriation of property. CBI teams conducted simultaneous searches at the offices and residential premises of the promoters and executives in Hyderabad, recovering incriminating documents. The Bank Security and Fraud Cell of the CBI led the probe.[8]
Aftermath
The accused named in the FIR include E. Sudhir Reddy (Managing Director), who is now deceased, R. Balarami Reddy (Joint Managing Director), and unknown public servants/others. As of the latest available public information (early 2026), the investigation was ongoing, with no chargesheet filing or court proceedings publicly detailed in major media outlets. The company remained in liquidation, with attempts to sell it as a going concern (including bids in 2021 and later years).[9] A 2025 report noted complications in the liquidation process, including a bidder default, though these issues were separate from the fraud allegations.[10]
IVRCL's listing and operations were effectively suspended due to insolvency and it became the first IBC case to be sold as a going concern.[11]
References
- ↑ "CBI Books Infra Firm IVRCL, Its MD for Alleged Bank Fraud of Rs 4837 Crore" (in en). https://thewire.in/banking/cbi-infra-firm-ivrcl-bank-fraud.
- ↑ "NCLT orders liquidation of IVRCL" (in en-IN). The Hindu. 2019-07-30. ISSN 0971-751X. https://www.thehindu.com/news/cities/Hyderabad/nclt-orders-liquidation-of-ivrcl/article28751951.ece.
- ↑ Kumar, V. Rishi (2018-03-04). "NCLT admits SBI's insolvency proceedings against IVRCL" (in en). https://www.thehindubusinessline.com/companies/nclt-admits-sbis-insolvency-proceedings-against-ivrcl/article22924476.ece.
- ↑ 4.0 4.1 Pandey, Munish Chandra (2020-12-30). "CBI books Hyderabad-based infra firm IVRCL for defrauding 8 public banks of Rs 4,300 crore" (in en). https://www.indiatoday.in/india/story/cbi-books-hyderabad-based-infra-firm-ivrcl-for-defrauding-8-public-banks-of-rs-4-300-crore-1754642-2020-12-30.
- ↑ "₹4,837-crore fraud: CBI registers case against IVRCL" (in en-IN). The Hindu. 2020-12-30. ISSN 0971-751X. https://www.thehindu.com/news/cities/Hyderabad/4837-crore-fraud-cbi-registers-case-against-ivrcl/article33457384.ece.
- ↑ "CBI books Hyderabad-based infra firm IVRCL for alleged bank fraud of ₹4,837 cr" (in en). 2020-12-30. https://www.livemint.com/companies/news/cbi-books-hyderabad-based-infra-firm-ivrcl-for-alleged-bank-fraud-of-rs-4-837-cr-11609341524863.html.
- ↑ "IVRCL floated 60 companies, set up multiple accounts to divert Rs 7,000 crore" (in en). 2021-01-05. https://www.newindianexpress.com/states/telangana/2021/Jan/05/ivrcl-floated-60-companies-set-up-multiple-accounts-to-divert-rs-7000-crore-2245475.html.
- ↑ Reddy, U Sudhakar (2020-12-30). "CBI books Hyderabad based infra company IVRCL for Rs 4,837 crore loan fraud". The Times of India. ISSN 0971-8257. https://timesofindia.indiatimes.com/city/hyderabad/cbi-books-hyderabad-based-infra-company-ivrcl-for-rs-4837-crore-loan-fraud/articleshow/80031623.cms.
- ↑ Ghosh, Shayan (2022-06-22). "IVRCL resolved under IBC, lenders set to recover dues | Company Business News" (in en). https://www.livemint.com/companies/news/ivrcl-resolved-under-ibc-lenders-set-to-recover-dues-11655830635162.html.
- ↑ Rebello, Joel (2025-11-29). "IVRCL's liquidation process takes a hit after bidder defaults on ₹1,200 crore payment". The Economic Times. ISSN 0013-0389. https://economictimes.indiatimes.com/industry/indl-goods/svs/engineering/ivrcls-liquidation-process-takes-a-hit-after-bidder-defaults-on-1200-crore-payment/articleshow/125644994.cms?from=mdr.
- ↑ Kumar, Chitranjan (2020-03-03). "IVRCL first IBC case to be sold as 'going concern' - BusinessToday" (in en). https://www.businesstoday.in/latest/corporate/story/in-a-first-gabs-megacorp-acquires-ivrcl-rs-1654-crore-under-ibc-251233-2020-03-03.
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