The Reserve Bank of India-appointed administrator at Srei Equipment Finance Ltd. has found fraudulent transactions worth more than Rs 3,000 crore conducted over FY20 and FY21.
The fraudulent transactions were found by BDO India LLP, which acted as transaction auditor for the administrator, according to the company’s filing with exchanges.
Loans involved with these fraudulent transactions were at Rs 2,512 crore, while the notional loss to the company stood at Rs 513.67 crore, the filing said. The notional loss was on account of charging lower interest rates while lending to 14 companies.
The administrator has filed an application with the Kolkata bench of the National Company Law Tribunal in this regard. The 14 respondents include Power Trust, Kanoria Foundation and its trustees, India Power Corporation Ltd., India Power Corporation (Bodhgaya) Ltd. and Tuticorin Electricity Supply Pvt.
This is an initial filing based on the transaction auditor’s report and further filings may be made in this case, the company said.
The resolution process at Srei Group NBFCs has been ongoing since December 2020, much before the regulator initiated insolvency proceedings. The group had previously proposed to invite investments in Srei Equipment Finance from international private equity investors. However, the plan did not materialise.
The RBI in October 2021 put Srei Infrastructure Ltd. and Srei Equipment Finance under insolvency proceedings, after superseding the board and appointing Rajneesh Sharma as the administrator.
Financial creditors have claims worth Rs 10,727.5 crore against Srei Infrastructure Finance and Rs 31,867.8 crore against Srei Equipment Finance.