The Central Bureau of Investigation (CBI) has booked Educomp Solutions Limited (ESL) and others for allegedly cheating Jammu & Kashmir Bank of ₹360.30 crore. The agency had earlier booked the related entities in two other bank fraud cases involving over ₹2,761 crore.
In the latest case, among those accused are the then company's managing director Shantanu Prakash; directors Vijay Kumar Choudhary and Vinod Kumar Dondana; guarantor Jagdish Prakash, Edu Smart Services Private Limited (ESSPL); and others. Unknown bank officials are also under the scanner.
The accused persons had approached the bank to get credit facilities for the execution of 1,233 contracts with schools for the installation and implementation of smartclass equipment through ESSPL. The value of each contract was about ₹30 lakh. The bank started extending the loans in December 2011.
In 2014, the bank along with other lenders under a consortium arrangement restructured the credit facilities and sanctioned more funds to the company for buying out receivables in ESSPL after meeting the obligations of the respective banks to which those receivables were charged and other liabilities were met.
After exiting the restructuring, the borrower moved an application under the Insolvency and Bankruptcy Code before the National Company Law Tribunal in May 2017 and the case was admitted.
During a forensic inquiry into the transactions, the auditors allegedly found multiple instances of irregularities. Invoices were forged, balance sheets manipulated, stock price was inflated and funds were diverted to unlisted subsidiaries, as alleged.
In July 2021, the agency had booked Educomp Infrastructure & School Management Limited (EISML), ESL and others for allegedly cheating a consortium of seven banks to the tune of ₹806.07 crore. The accused persons had siphoned off the funds through related parties and associate entities.
As alleged, the ESL subsidiary EISML provided infrastructure services on long-term lease basis and management solutions to the schools run by independent trusts and societies. It developed school infrastructure and leased it out to the clients, earned pre-determined yield rentals for the school's assets, apart from a fixed percentage share in the annual fee revenue of the organisations running the schools.
The CBI case alleged that loan funds were used to make investments or provide loans and advances to the related parties or subsidiaries.
Yet another case was registered against ESL and others in February 2021 for allegedly cheating a consortium of 13 banks of ₹1,955 crore. Forged documents were used to get the credit facilities, funds were diverted, and loans extended to the related parties were written off, as alleged.
Based on the CBI case, the Enforcement Directorate had recently attached ₹90.31 crore assets of an Educomp group entity.