Mumbai More trouble is brewing for the Kolkata-based Shreya Group, with the RBI-appointed administrator reporting cases of new fraudulent transactions. Two people with knowledge of the matter said that more skeletons are likely to fall from the cupboard.
In June and July, the fraud was reported by administrator Rajnish Sharma. 3,025 crore and 2,134 crores respectively. Last week’s disclosures have taken the total fraud amount 5,396 crores. BDO India LLP is auditing the group’s financial transactions as part of the resolution process.
On 6 August, the auditor informed the Kolkata Bench of the National Company Law Tribunal (NCLT) about fresh fraud under sections 60(5) and 66 of the Insolvency and Bankruptcy Code (IBC) involving Ashwath Quipo Infraprojects Pvt Ltd. Ltd., which provides urban water and sewage infrastructure solutions, and Hemant and Sunil Kanoria, founders of the Srei Group. Details of the findings were disclosed in a regulatory filing on Wednesday.
“The effect of the transaction, excluding the interest payment calculation, is approximately equal to 236.86 crore,” it said in the filing. The alleged fraud was part of credit disbursement and debt restructuring of Ashwath Quipo’s accounts by Shreya Equipment Finance Company under its erstwhile management between FY19 and FY22.
This is the fifth application filed by the administrator before the NCLT since the first case of fraud came to light on June 13.
“Right now in the pipeline and the legal team is going through them to find out whether they can be included in future applications to the NCLT. The team is expected to move in a few days,” said one of the people above, requesting anonymity.
He said only those alleged fraudulent transactions would be referred to which legal advisors feel would come under investigation in the tribunal. “This practice will allow potential investors to have a clean balance sheet, and not have to worry about suspicious transactions coming to bite them later on,” he said.
The exposure of financial creditors of two group companies, Srei Equipment Finance and Srei Infrastructure Finance, is 32,750 crore, as of July 30, as per the claims. Canara Bank’s exposure is 3,470 crore, followed by Union Bank of India ( 2,935 crore), Punjab National Bank ( 2,934 crore) and State Bank of India ( 2,808 crore).
Last October, the RBI superseded the boards of two group companies and appointed Sharma, a former Bank of Baroda executive, as administrator, before referring the matter to the NCLT.
On June 15, Mint reported that the legal team working on Srei Group’s insolvency resolution expected to detect more fraud.
The insolvency resolution process involves audits where thousands of debtors’ transactions are scrutinized to find discrepancies. In the Dewan Housing Finance Corporation Limited (DHFL) case, the first non-bank financier was referred to the insolvency tribunal, and later acquired by the Piramal Group, the administrator filed a case of fraud. 12,705 crore in September 2020 and others 6,182 crore in February 2021, VCCircle reported.
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