GVK Gets Notice After Whistleblower Complaint On Fraud At Mumbai Airport
The GVK Group, which is in locked in a legal battle with the Adani Group on stake sale in its flagship Mumbai International Airport, on Tuesday said it has received a notice from the Ministry of Corporate Affairs, seeking some details about the airport operator.
The group is resisting the Adani Group’s bid to buy out the 13.5 percent stake being held by its South African joint venture partner Bidvest in MIAL. The issue is with the Bombay High Court.
The Hyderabad-based infrastructure major, which has interest in power, coal mines and aviation among others, however, denied that other group companies have also received notices from the ministry.
"We confirm only MIAL has received a communication asking for certain details/information, which are being furnished," GVK said in a statement.
MIAL is a joint venture between GVK-led consortium of Bidvest and Airports Company of South Africa, and the state-run Airports Authority, in which GVK holds majority 50.5 percent and Airports Authority of India 26 percent and the remaining 23.5 percent are with the two foreign partners.
While Bid Services Division Mauritius or Bidvest owns 13.5 percent, Airports Company of South Africa Global holds 10 percent in the nation's second busiest airport.
The statement came after a section of the media reported that the GVK group was on the ministry radar following a whistle-blower alleging siphoning of funds, issuance of fake bills to inflate cost to get undue Customs and Excise duty benefits among others.
"We are not aware of any whistleblower complaint or any allegations that have appeared in a section of the media, which are baseless," the company said.
GVK also claimed that none of the group companies, barring MIAL, have received any notice from the ministry.
The tussle with the Adani Group has its origins in GVK not letting Bidvest sell its stake in MIAL to Adani. Instead, it wants to buy out both South African partners.
In the meanwhile, the Adani Group had entered into a share purchase agreement with Bidvest. Following GVK's bid to stall it, the Adani Group took the matter to an arbitration tribunal which asked the former to make payments by Sept. 30 first which was extended to Oct. 31.
In the meanwhile, the Adani Group dragged the matter to the Bombay High Court early October where the matter is being heard now.
The Adani Group are betting big on the airports space, having bagged mandate to run six domestic airports from Airports Authority of India earlier this year and are keen to have a foothold in the nation's second busiest airport by purchasing the 13.5 percent stake with the South African firms.
Bidvest had agreed to sell its entire stake in MIAL to Adanis for Rs 1,248 crore or Rs 77 a share and the Adani Group moved the Bombay High Court last month seeking execution of its agreement with Bidvest.
An arbitration tribunal had on Sept. 15 gave GVK time till Oct. 31 to pay Bidvest. The initial deadline was Sept. 30.