CBI Books IL&FS Energy Development Company, Former MD Over Rs 212-Crore Bank Loss

The CBI has registered a case against IL&FS Energy Development Company Limited (IEDCL), its former managing director and other senior officials for allegedly causing a loss of Rs 212.34 crore to Canara Bank, officials said on Friday.

According to the FIR, the company was sanctioned a short-term loan of Rs 100 crore for 12 months under a multiple banking arrangement involving the erstwhile Syndicate Bank. The loan was intended to finance its solar park, wind energy and solar energy projects being implemented through various project companies.

The FIR further alleged that the London branch of the erstwhile Syndicate Bank had extended a term loan of USD 50 million for onward lending to the borrower's existing and new special purpose vehicles (SPVs) engaged in infrastructure projects. The funds could also be used for other purposes permitted under the Reserve Bank of India's External Commercial Borrowings guidelines, it said.Syndicate Bank was subsequently merged with Canara Bank.

A forensic audit conducted by Canara Bank allegedly found that the borrowed funds had been diverted and deployed for purchases and activities other than those for which they were sanctioned, according to the FIR.

The funds were allegedly routed through group and associate entities and other transactions, with inadequate supporting documentation and questionable accounting treatment.These transactions allegedly resulted in a wrongful loss of Rs 212.34 crore to the bank, the FIR stated.

The investigating agency has also alleged that IEDCL misrepresented its financial statements to conceal its deteriorating financial position.

The case centres on the alleged diversion and misuse of bank loans intended to support the company's renewable energy and infrastructure projects.

The allegations are part of the FIR registered by the CBI. Further details about the investigation and the specific roles attributed to the former managing director and other senior officials were not provided in the information available.The allegations are yet to be established through the legal process.