CBI files case against IL&FS Transportation Network for defrauding 19 banks

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On Friday, the Central Bureau of Investigation (CBI) filed a case against IL&FS Transportation Network Ltd and its directors.

The case was filed for allegedly defrauding 19 banks to the tune of Rs 6,524 crore between 2016-2018, NDTV The report said.

Among the banks allegedly defrauded by IL&FS include Punjab National Bank (PNB), Canara Bank, Bank of India (BoI), State Bank of India (SB), Axis Bank, Yes Bank, among others. .

Mumbai-based IL&FS Transportation Network Limited (ITNL) and its directors Karunakaran Ramchand, Deepak Das Gupta, Mukund Gajanan Sapre and then Chief Financial Officer (CFO) Dilip Lalchand Bhatia have been booked on charges of criminal conspiracy and fraud as well under the provisions of the Prevention of Corruption Act.

Quoting Canara Bank’s complaint to the CBI, the report said, “ITL has embezzled public funds in excess of Rs 6,524 crore and thus deceived all the lenders. The accused are white-skinned criminals who know very well the intricacies of the law and know very well to save themselves from the clutches of the law.”

The fraud by IL&FS Transportation Network Ltd (ITNL) and its directors came to light in 2018 after the National Company Law Tribunal (NCLT) appointed a new board that took over parent company IL&FS.

The report added, citing a First Information Report (FIR), that the forensic audit of IL&FS and its group of 348 companies was conducted by Grant Thorton. It also noted potential irregularities in reporting expense allowances, which could have a direct impact on reported earnings.

The company also allegedly overestimated its income, highlighting the company’s improper financial position.

ITNL also transferred significant funds without accounting or entering records into the company’s software. Commercial papers have been arranged to allow periodic transactions between ITNL and other group companies, FIR reported.

Other problems uncovered included the taking of bogus competitive quotes from subcontractors and the recording of bogus expenses on the purchase of 459 tonnes of steel from a vendor registered as a tire dealer, the report said.