Former resolution professional moves NCLT on ‘fraud’ in Bheema Cements’ forensic audit

Hyderabad: Days after the Ministry of Corporate Affairs ordered a probe into alleged fraud at Bheema Cements that recently changed hands in a bankruptcy resolution, its former resolution professional moved the National Company Law Tribunal (NCLT) claiming to have unearthed the fraud in a forensic audit.

The ministry had earlier this month served notices on 17 members, which include both the erstwhile and new promoters, following complaints by retail investors alleging a fraud that benefited the promoters. Allegations were also made that banks concerned in lending to the defaulting cement company compromised on huge public money.

Apart from asking the promoters, erstwhile and new, to furnish certain details and assigning the probe responsibility to the assistant registrar of companies at Hyderabad, the ministry also said it will soon conduct “investigation of the books of accounts and other books and papers”.


Shortly after the MCA serving notices on Bheema Cements’ current and erstwhile promoters, former Tribunal-appointed resolution professional G Madhusudhan Rao on October 16 moved NCLT with the findings of a forensic audit, which he claims to have ordered during his tenure.

The former RP sought action against the erstwhile promoters under the Insolvency and Bankruptcy Code to recover 68.89 crore allegedly embezzled by them. Rao said the forensic audit conducted by Dhanunjaya & Haranath was submitted on August 16 last year.

In July 2018, the NCLT bench at Hyderabad had ordered initiating bankruptcy proceedings at Bheema Cements while admitting the petition filed by JM Financial Asset Reconstruction Company. In all, 492 crore of claims from the lenders were admitted and a committee of creditors was accordingly constituted.

A resolution application from the consortium of Fortuna Engi Tech and Murgud Vincom involving 190 crore was approved by the committee of creditors in October last year and the Tribunal approved the resolution plan this February.

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