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CBI Files Case Against IL&FS Subsidiary for Swindling Rs. 6,524 Cr

The audit revealed that the ITNL Board of Directors did not include information on quarterly international exposures.

CBI Files Case Against IL&FS Subsidiary for Swindling Rs. 6,524 Cr

Sentinel Digital DeskBy : Sentinel Digital Desk

  |  3 Jun 2023 12:24 PM GMT

NEW DELHI: According to officials on Friday, the Central Bureau of Investigation (CBI) has filed a complaint against IL&FS Transportation Network Ltd. and its directors for allegedly cheating 19 banks out of Rs. 6,524 crores between 2016 and 2018. The Punjab National Bank, Canara Bank, Bank of India, State Bank of India, Axis Bank, Yes Bank, and numerous more banks are among those allegedly affected by this alleged fraud. A division of IL&FS Ltd, which declared bankruptcy in 2018, is IL&FS Transportation Network.

Canara Bank, the complainant in this case, said to the CBI, “Public money of more than Rs 6,524 crore has been misappropriated by ITL and thereby cheated all the lenders. The accused persons are white colour criminals and very well know the intricacies of the law and know to save themselves from the clutches of the law.”

The Mumbai-based ITNL, its directors Karunakaran Ramchand, Deepak Das Gupta, Mukund Gajanan Sapre, and former Chief Financial Officer (CFO) Dilip Lalchand Bhatia were all named in the CBI's First Information Report (FIR) as being involved in an alleged criminal conspiracy and cheating as well as violating the Prevention of Corruption Act.

According to the officials, the agency recently searched the accused's homes in Mumbai, Delhi, and Gurugram. The accused allegedly engaged in a criminal conspiracy to defraud 19 institutions using various banking arrangements, with the Canara Bank serving as the largest lender.

In 2018 the loan account was categorised as a non-performing asset (NPA), and in 2021 it was categorised as "fraud".

The Canara Bank claimed in their CBI complaint, which served as the foundation for the FIR, “The accused misappropriated the sanctioned credit facilities by cheating, diversion of funds, circular transactions between related/sister concerns, misrepresentation of books of income and expenditures, etc. thereby caused wrongful loss of total Rs 6,524 Crores (as on 31.10.2021) to the lending banks and corresponding wrongful gain to themselves.”

The bank said in its lawsuit that ITNL, an IL&FS subsidiary, is the largest owner of "Built, Operate and Transfer" road assets in India and a market leader in the transport infrastructure sector with its presence in metro rail, city bus service, and border checkpoints.

According to the bank, the account started to become abnormal, and a forensic audit was then conducted on it. The audit revealed that the ITNL Board of Directors' minutes for the fiscal years 2015–16 and 2017–18 failed to report quarterly international exposures. The bank claimed that it demonstrated a probable violation of the company's policy against insider trading by one of the senior managerial figures, who appeared to be getting approval to sell ITNL shares. The audit also raised red flags about possible financial misappropriation, problems with getting phoney competitive quotes from subcontractors, and phony expenditures for the purchase of steel from a supplier who is listed as a tyre trader, among other things.

According to the CBI, the defendants defrauded the consortium out of Rs 6,524 crore and improperly increased their own wealth.

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