IL&FS Financial Services (IFIN) kept extending loans to several companies so that they could avoid defaulting on their debt repayments, according to the report of the Serious Fraud Investigations Office (SFIO). By doing so, the SFIO report says that IFIN was able to inflate its financial performance by ensuring that interest income is generated on the loans that have been regularised through fresh funding which otherwise wouldn\u2019t have been considered as income in its financial statements. Moreover, a fresh interest income was generated through the disbursement of these loans. Finally, provisioning for non-performing assets (NPA) was deflated to display a strong balance sheet and healthy asset quality on all these loans. The ever-greening of loans resulted in inflated profits, suppressed provisioning and non-disclosure of possible NPAs in the books of IFIN. The SFIO report says that \u201cto this extent, the financial statements were misstated to show a window-dressed picture of the financial statements". There are instances where an account was written off in the books as bad debt but fresh loans were advanced to the company despite the fact IFIN had written off the previous debts of the same borrower group. According to the report: this is observed in the case of credit facilities extended to Shiva Group of companies. It is observed that Shiva Group has been a defaulter in its loan commitments from 2011. In spite of this, IFIN extended another loan facility of Rs 175 crore to Shiva Shelters & Construction and disbursed an amount of Rs 50 crore in February 2018. IFIN also advanced Rs 1,630.05 crore to group entity IL&FS Transportation Networks (ITNL) in violation of the RBI's prudential norms (credit concentration) for exposure to group companies by non-banking financial companies (NBFC). The loans ultimately advanced to ITNL were layered through eight companies. The SFIO found that the loans sanctioned to these companies without any clear purpose or against a specific project in hand. Moreover, the eight companies had a negative networth. Finally, the SFIO report also says the loans to ITNL were approved by a committee of directors of IFIN whose members were the same individuals as in the committee of directors of ITNL, the borrowing entity. Public money was therefore, extended to group companies by IFIN without the required security and due diligence. Over the years, IFIN has lent `30 crore to Housing Development and Infrastructure (HDIL), as well as to few privately held real estate firms such as Abhitech Developers (`225 crore) and Dev Rishabh Real Estate (`175 crore), among others. The report was cited by Sanjay Shorey, counsel for ministry of corporate affairs (MCA), before the National Company Law Tribunal (NCLT), on Monday. The new board of IL&FS has submitted a second progress report detailing assets to be sold, various cost-cutting measures and its assessment of the liquidity crisis at the debt-laden firm. IL&FS also appointed L&T veteran N Sivaraman as the chief operating officer.