Comments
The Serious Fraud Investigations Office (SFIO) has asked its parent, the Ministry of Corporate Affairs, if it can probe engineering giant Larsen & Toubro and its subsidiaries, over allegations of misappropriation of funds and bank loans.
The SFIO’s move follows allegations by Kahkashan Perween, a Rajya Sabha MP from Bihar, that L&T and its subsidiaries may have loans aggregating to ₹8,000 crore from various public sector banks and they “face the serious threat of becoming NPAs.”
Perween had written to the SFIO seeking a forensic audit of L&T’s books and alleged that two L&T subsidiaries — L&T Halol and L&T Chennai Tada Ltd — had defaulted on payments to banks including Allahabad Bank, UCO Bank, Oriental Bank of Commerce, Syndicate, Vijaya Bank & IDBI.
The letter by the MP alleges that the parent company let L&T Halol enter SDR (strategic debt restructuring) in 2015, and since then it’s been missing payments. L&T Chennai became an NPA in 2016. The allegations also suggest a possible nexus with banks to not enforce guarantees by L&T subsidiaries, resulting in the non-recovery of ₹1,300 crore in dues. It is also alleged that L&T and some of its associate companies and subsidiaries have been termed as habitual defaulters by the National Highways Authority of India (NHAI). Recently, the NHAI had cancelled road projects of 20 contractors, including L&T, for not being able to fulfil obligations as per deadline.
Emails sent to SFIO remained unanswered.
L&T denied the charges and said it was not aware of the possibility of an SFIO probe.
Replying to an email query, L&T said, “We are not aware of any so called investigation as mentioned by you. We strongly deny the allegations which are entirely baseless and without merit.”
“L&T has always maintained high standards of corporate governance and compliance of statutory and regulatory requirements. It is important to note that L&T Infrastructure Development Pvt. Ltd. (L&TIDPL) the Promoter of L&T Chennai Tada Tollways Limited and L&T Halol Shamlaji Tollway Limited has neither received a return of nor a return on its investments made in these two companies. In spite of the specific commercial understanding that the projects are funded on a non-recourse basis, the Promoter has infused into the two projects substantial amounts over and above its obligations and commitments under the loan documents to service the loans from the lenders,” the L&T statement said.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.