The Enforcement Directorate has identified 14 entities to which the IL&FS Financial Services (IFIN) had extended loans to the tune of ₹2,270 crore that remained unpaid. The funds were allegedly routed to the IL&FS Transportation Networks Limited (ITNL) and its subsidiaries as loans at higher interest rates.
Based on the documents seized during the investigation, the agency believes these entities, called third parties, were told to transfer the loans either to the ITNL or its Special Purpose Vehicles (SPVs) in the form of loan.
“By this modus operandi, ITNL and its SPVs received huge loans and ₹2,270 crore (as per Grand and Thorton Report) remained outstanding against those parties to IFIN who in turn funded to ITNL or its SPVs,” according to the chargesheet filed by the ED last week.
The third parties, which were used to route the funds, identified by the agency are Beigh Construction Company, New India Structures, Vistar Financers, Sangam Business Credit, Kalyan Sangam Infratech, GHV Hotels (I), Attivo Economic Zones (MUMBAI), Prakash Constrowell Ltd and Wavell Investments.
The others are Sahaj E-Village, Giridhan E-Village, Empower India, Avance Technologies and Bharat Road Networks Limited.
The loans were eventually used by ITNL, FagneSongard Expressway, Chennai Nashri Tunnelway, Srinagar Sonmarg Tunnel Ltd. and Sikar Bikaner Highway Ltd., as alleged.
The ED also alleged that the IFIN had sanctioned loans to these third parties or contractors without proper collateral securities, following which they had entered into agreements with the ITNL or its SPVs.
“The rate of lending was 1.5% to 2% higher than the rate of borrowing and thus, there was a profit to those third parties/contractors and being non-NBFC, they were not entitled for the same. Investigations also indicate that the illegal profit thus earned probably was shared with the ITNL officials and arrangers.”
Investigation revealed that the IFIN was fully aware that loans given to the aforesaid third parties would be transferred to the ITNL or its SPVs, said the agency.
“Ultimately, ITNL and its SPVs failed to repay the principal amount of loan to the said entities and the same remained outstanding. Consequently, IFIN was not paid by the said entities to the tune of ₹2,270 crore. which had been sanctioned by IFIN by committing scheduled offence,” it is alleged.
