The pilot was nearing the completion of 50 hours of flying under the supervision of the company chief pilot. For this flight the chief pilot decided to travel in the passenger section of the aircraft, to demonstrate his confidence in the pilot. The aircraft was rotated at 90 knots and just after liftoff, at about 50 feet above the runway, the pilot heard a loud bang and noticed smoke coming from the left engine. At about this time the chief pilot started to call instructions to the pilot. Power was increased on the right engine and the landing gear and flap retracted. However, the aircraft began to descend and veer to the left before touching down on its undersurface. It skidded for 103 metres and came to rest 155 metres to the left of the runway centreline abeam the upwind threshold. An inspection of the left engine revealed that the thread of a nut on one of the number 2 cylinder connecting rod big end bolts was stripped, causing the big end to become detached from the crankshaft and forcing the connecting rod through the crankcase. The reason for the stripping of the nut thread could not be established.