The Central Bureau of Investigation has registered a bank-fraud case against IL&FS Energy Development Company Ltd and five former senior executives over an alleged ₹212.34 crore loss to Canara Bank.
The case was registered on October 21 following a complaint from Canara Bank’s Circle Office in Bandra East, Mumbai.
The CBI subsequently carried out searches at premises linked to the accused in Mumbai, Delhi, Noida and other locations.
Investigators seized banking records, deposit slips, mutual-fund portfolio documents, property details and company ledgers that are now being examined as part of the probe.
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₹100 Crore and $50 Million Loans Under Investigation
The allegations relate to two major credit facilities obtained from the erstwhile Syndicate Bank, which later merged with Canara Bank.
According to the FIR, IL&FS Energy Development Company received a short-term loan of ₹100 crore from the bank’s Large Corporate Branch in Mumbai.
The loan was intended to support solar parks, wind-energy projects and solar-energy projects being implemented through the company’s project entities.
The company also received a $50 million loan from Syndicate Bank’s London branch.
That facility was meant for onward lending to special-purpose vehicles involved in existing and new infrastructure projects and for other uses permitted under Reserve Bank of India rules governing external commercial borrowings.
The CBI alleges that the money was not ultimately used for the purposes for which it had been sanctioned.
Forensic Audit Allegedly Found Fund Diversion
The case is based partly on findings from a forensic audit commissioned by Canara Bank.
According to investigators, the audit found that loan proceeds were diverted through group and associate companies.
The CBI alleges that funds were used for purchases and transactions unrelated to the purposes stated when the loans were sanctioned.
Investigators are also examining whether there was adequate supporting documentation for the transactions.
The FIR further alleges questionable accounting treatment and misrepresentation of the company’s financial position.
These allegations have not been proved in court.
The agency is now attempting to determine where the borrowed money ultimately went and whether other individuals or public officials helped facilitate the alleged diversion.
Five Former Directors Named in FIR
The CBI has named five former senior executives of IL&FS Energy Development Company in the case.
They are Sunil Wadhwa, Anoop Seth, Hari Sankaran, Ramesh Chandra Bawa and Arun Kumar Saha.
Unknown public servants and private individuals have also been included in the FIR.
The case has been registered for alleged criminal conspiracy and cheating, along with offences under the Prevention of Corruption Act.
The inclusion of unidentified public servants indicates that investigators are also examining whether officials outside the company played any role in the transactions.
However, the CBI has not yet publicly identified those individuals or alleged specific acts by them.
Searches Yield Financial and Property Records
Following registration of the case, the CBI searched premises associated with the company’s former directors.
Investigators recovered what the agency described as relevant financial records.
These included bank documents, deposit slips, records relating to mutual-fund portfolios, details of bank accounts and properties, and company ledgers.
Such records can help investigators reconstruct the movement of loan funds.
They may also show whether money passed through related companies before being used for another purpose.
The CBI is now tracing the end-use of the loans and examining the role of each individual named in the complaint.
No conviction or finding of guilt has been recorded against the accused.
Case Adds to Long-Running IL&FS Scrutiny
IL&FS and several of its group companies have faced years of regulatory and investigative scrutiny following the group’s financial crisis in 2018.
The collapse exposed heavy debt across the infrastructure conglomerate and triggered investigations into accounting practices, lending decisions and the movement of funds across group companies.
IL&FS Energy Development Company was part of that broader group structure.
The latest CBI case is specifically focused on the alleged loss suffered by Canara Bank and the use of the ₹100 crore and $50 million credit facilities.
It should therefore be treated as a separate criminal investigation rather than as proof of wrongdoing established in earlier IL&FS proceedings.
The agency says further investigation is continuing to identify the full extent of the alleged conspiracy and the roles of any additional public servants or private individuals.
What this means for you:
Large bank-fraud cases often centre on whether borrowed funds were actually used for the purpose stated in loan documents. For lenders and investors, forensic audits and related-party transactions can become critical indicators when money moves through multiple group companies.
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