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ADIA-backed GVK faces CBI probe for Mumbai airport fraud
Photo Credit: Reuters

India’s federal police have filed a criminal complaint against the chairman of conglomerate GVK Group and others for alleged fraud in the development of Mumbai’s international airport that resulted in the government losing more than $92 million.

GVK Group, which has interests in energy, resources, airports and hospitality, led a consortium that formed a joint venture - Mumbai International Airport Ltd - with the Airport Authority of India (AAI) in 2006 to modernise and operate the airport under a revenue-sharing agreement.

The Central Bureau of Investigation (CBI) late on Wednesday released a complaint alleging that GVK’s chairman, Gunupati Venkata Krishna Reddy, “connived” with his son and some AAI officials to siphon off funds meant for the development of the airport, one of country’s busiest.

GVK, AAI and Mumbai International Airport Ltd did not respond to requests for comment. Shares in the group’s flagship company, GVK Power & Infrastructure, were down 4.5% at 0810 GMT on Thursday.

According to the CBI, Mumbai International Airport generated fake work contracts during 2017-18 and transferred funds to several companies for real-estate developments that were not executed.

Their modus operandi also included misusing the airport’s surplus reserves, inflating its expenditure, and underreporting its revenue, the police alleged.

In October, GVK signed binding agreements to raise more than $1 billion in its airports holding company from Abu Dhabi Investment Authority, Canada’s Public Sector Pension Investment Board and Indian government-backed National Investment & Infrastructure Fund.

It is also developing another airport near Mumbai.

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