PNB : accuses former founders of Srei businesses of loan fraud of Rs 2,434 crore
PNB: The former proprietors of Srei Equipment Finance and Srei Infrastructure Finance are accused of loan fraud of Rs 2,434 crore, according to Punjab National Bank (PNB).
The state-run PNB stated in a late-evening exchange filing that it had reported borrowal fraud to the RBI against the former promoters of Srei Equipment Finance and Srei Infrastructure Finance in accordance with the applicable provisions of the SEBI (LODFR) Regulations, 2015 and the Bank’s Policy for determining the materiality of events/information required to be reported to the Stock Exchanges.
According to PNB, Srei Equipment Finance is responsible for Rs 1,240.94 crore of the total illegal borrowings, while Srei Infrastructure Finance is responsible for the remaining Rs 1,193.06 crore.
Additionally, the public sector lender said that it had 100% provisions for these loans. According to the bank, a forensic examination revealed anomalies such loans to related parties and possible evergreening of debts, which is why these two accounts were declared fraudulent.
Hemant Kanoria, the creator of Srei, has contested the forensic audit report as the foundation for the fraud categorization, pointing out that the issue is subjudice.
In relation to Srei enterprises, other institutions including Punjab & Sind Bank, Bank of Baroda, and Union Bank of India have already reported loan fraud.
Since 2021, the Srei group has been going through an insolvency resolution procedure. In 2023, the National Asset Reconstruction Company proposed a resolution plan, which was accepted by the National Company Law Tribunal. After discovering governance problems and defaults, the Reserve Bank reported the Srei group to the NCLT in October 2021. The regulator then took control from the boards of Srei Infrastructure Finance and Srei Equipment Finance.
NARCL was the victorious bidder for SIFL and SEFL, which together owed lenders Rs 32,750 crore, in February 2023. NARCL completed the purchase by January 2024 after winning the bid in February 2023 and receiving NCLT approval in August 2023.