The curious case of Virendra Mhaiskar, IRB Infrastructure and Nitin Gadkari

Reports of allegedly dubious deals between Mumbai-based IRB Infrastructure and Bharatiya Janata Party (BJP) chief Nitin Gadkari have opened a Pandora's Box for Virendra D. Mhaiskar, Chairman and Managing Director of the Rs 3,258 crore IRB Infrastructure.

It is alleged that IRB group companies invested Rs 1.85 crore in 2001 and gave a loan of Rs 165 crore to the Gadkari-promoted Purti group. In return, it is alleged that the group won road contracts when Gadkari was the public works department (PWD) minister of Maharashtra.

In a note to stock exchanges (NSE and BSE), IRB Infrastructure has denied all the allegations.

Speaking to Business Today, Mhaiskar claimed that the entities that carried out these transactions were not associated with IRB Infrastructure at the time the transactions took place. For instance, in 2001, when Ideal Road Builders Pvt Ltd made a Rs 1.85 crore investment, it was not a subsidiary of IRB Infrastructure.

"It was only in financial year 2006/07, at the time of a family reorganisation, that Ideal Road Builders became our subsidiary," said Mhaiskar.

Also, the loan was given by Global Safety Vision Pvt Ltd., which is a promoter group entity run by his father. "It's some kind of conspiracy against us" he added.

Nevertheless, the next few days are likely to be challenging for Mhaiskar.

The IRB chairman has, in fact, been in the news off and on for the last two years. In 2010, he was investigated by the CBI for possible involvement in the murder of RTI activist Satish Shetty in Maharashtra. Later, he was given a clean chit in the matter. In July last year, the income tax department raided around 40 properties of IRB in Pune and Mumbai. However, nothing came of it.

Mhaiskar started his career at an early age by joining the family business. Under him, IRB Infrastructure has gone from strength to strength. Its revenues have grown at a compound annual growth rate (CAGR) of 59 per cent over the past five financial years.

The IRB group, an engineering, procurement and construction or EPC player, has constructed over 2,000 km of highways under the build-operate-transfer (BOT) model. These include sections of the Golden Quadrilateral highway network connecting the four metros.

IRB operates and maintains the Mumbai-Pune expressway, one of the prime infrastructure projects in the country. As of March 2012, the company had orders worth Rs 8,515 crore.