Srei Equipment Finance reports Rs 1,500 cr more fraudulent transactions
More fraudulent transactions have been detected by the forensic auditors in Srei Equipment Finance, a wholly owned subsidiary of Srei Infrastructure Finance. Forensic auditor BBDO India LLP, which was hired by the administrator Rajneesh Sharma, has detected avoidance transactions involving Rs 1,500 crore by Srei Equipment Finance during the period 2013-14 to 2020-21.
These fraudulent transactions were with respect to loans given to Aviral Maritime Infrastructure Dahej Private Limited and Adinath Port and Logistics Pvt Ltd, Kitply Industries, Swachh Group, Whitefield Paper Mills and Bengal Industrial Infrastructure Ltd.
Earlier in June this year, the Administrator of Srei Equipment Finance Limited had reported fraud transactions worth Rs 3,025.73 Crore by the promoters of the company during 2019-2020 and 2020-2021.
Those transactions included disbursements made to certain entities — Power Trust, M/s Kanoria Foundation and its trustees, India Power Corporation Limited, India Power Corporation (Bodhgaya) Limited, Tuticorin Electricity Supply Private Limited, Bhaskar Silicon Private Limited, Green Utility Private Limited, Environ Energy Corp India Private Limited, Meenakshi Energy Limited, Devi Trading and Holding Private Limited, and others.
In the latest cases of fraudulent detected, the auditor has named promoters — Hemant Kanoria and Sunil Kanoria – for their involvement in these transactions apart from the ‘beneficiary’ companies. The biggest transaction involving Rs 838 crore was loan disbursement to Aviral Maritime Infrastructure Dahej Private and Adinath Port and Logistics Pvt. Ltd.
Loan amounts of Rs 229 crore to Kitply and Rs 221 crore to Swachh Group have also been categorised as fraudulent loans.
It is to be noted here that the central bank initiated the insolvency proceedings against the two NBFCs – Srei Infrastructure Finance and Srei Equipment Finance — in October 2021 after a consortium of lenders led by UCO Bank sought RBI’s directions on pursuing recovery of dues from the Srei Group after loans worth about Rs 30,000 crore was identified as non-performing assets (NPA) this quarter.
The insolvency process is still on and 15 prospective resolution applicants are in fray to acquire the two NBFCs. The most recent ones to show interest in acquiring the two NBFCs are ArcelorMittal subsidiary AM Mining India Private Limited and Capri Global Holdings Pvt Ltd.
Also see: Srei Equipment Finance reports Rs 3,000 crore fraud transactions
