The Reserve Bank of India-appointed administrator for the insolvent Srei firms has received an initial report from transaction auditor BDO India, which indicated that there were certain transactions which are “fraudulent in nature”. The total impact of these fraudulent transaction amounts to around Rs 3,025.73 crore.
The administrator, Rajneesh Sharma, has received an initial report from the professional agency appointed as the transaction auditor (BDO), indicating that there were certain transactions which are fraudulent in nature, according to Section 66 of the IBC. On the basis of the investigation and observations of the transaction auditor, the administrator has filed an application in respect of disbursements made to certain entities, referred to as the Power Trust group of entities, before the Kolkata bench of the National Company Law Tribunal (NCLT) under Section 60(5) and Section 66 of the Code on June 10, 2022 against Power Trust, Kanoria Foundation and its trustees, India Power Corporation, India Power Corporation (Bodhgaya), Tuticorin Electricity Supply, Bhaskar Silicon, Green Utility, Environ Energy Corp, Meenakshi Energy, Devi Trading and Holding and certain other entities. “It is to be noted that this is an initial filing based on the report submitted by the transaction auditor and further filings may be undertaken, in due course,” Srei Equipment Finance (SEFL) said in a stock exchange filing.
SEFL, in its BSE filing, said the report relates to certain fraud transactions undertaken by the company during 2019-20 and 2020-21 and the monetary impact of these transactions on it is Rs 2,512.06 crore, being the amount outstanding in the books of the company as of October 8, 2021. Besides, Rs 513.67 crore is the amount considered as due and outstanding towards notional loss to the company on account of fraudulently charging a lower rate of interest to certain entities referred to as the Power Trust group of entities.