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The erstwhile management of Srei Equipment Finance gave fraudulent loans of over ₹2,000 crore to three entities between FY18 and FY21, according to the company’s transaction auditor, BDO India LLP.
The impact of the transactions—with Samara Energy Ltd, Viom Infra Ventures and the Shrishti Group—is estimated at ₹2,134 crore.
Of this, ₹9.1 crore is the loss to the company on account of “charging an unreasonably favourable rate of interest and favourable interest terms to the customer”, or the undervalued component of the loan transactions, the parent company, Srei Infrastructure Finance, said in multiple exchange filings.
This is the second tranche of fraudulent transactions identified by BDO India, after it reported ₹3,025 crore of such transactions earlier in June.
Audit review
“It is a continuous process, and as and when the transaction auditor is completing the reports, they are filed with the NCLT. The process is running it should be completed within a week,“ said an executive in knowledge of the matter.
Around 70 per cent of the review by BDO India has been completed, and the remaining should be completed in a week, they added.
In October 2021, the Reserve Bank of India has superseded the board of Srei Infrastructure Finance and its wholly-owned subsidiary, Srei Equipment Finance. As it initiated insolvency proceedings, the regulator appointed Rajneesh Sharma as the administrator of the companies, who in turn engaged with BDO India LLP to act as the transaction auditor.
The Srei Group administrators, Rajneesh Sharma and Sunil Kanoria, refused to comment on the matter.
The source said not all the identified transactions are fraudulent loans. In most cases, underlying assets are available but there is some monetary divergence, partial syphoning of funds, or discrepancies in terms of project approvals and fund utilisation.
“They come under the fraudulent category, so the findings have to be submitted under Section 66 of the IBC,” they said.
Fraudulent Transactions
The monetary impact of the transactions with Samsara Energy Ltd. reported today is ₹285 crore, with Viom Infra Ventures it is ₹434 crore, and with the Shristi Group it is ₹1,415 crore.
The filings with respect to Samara Energy and Viom Infra Ventures named the two entities and Srei Group brothers Hemant Kanoria and Sunil Kanoria.
The filing for Shrishti Group named the Kanoria brokers: Kanoria Foundation, Hari Prasad Kanoria, and Sujit Kanoria. Shristi Infrastructure Development Corporation, Bengal Shristi Infrastructure Development, Suasth Health Care (India), Avarsekar Realty Pvt. Ltd., Sarga Hotel Pvt. Ltd., and Adishakti Commercial Pvt. Ltd.
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