The Central Bureau of Investigation (CBI) has registered a case against Essel Group chairman Subhash Chandra and three others in connection with an alleged financial fraud involving approximately ₹1,322 crore in loans extended by LIC Housing Finance Ltd (LICHFL).
The FIR follows a complaint lodged by LICHFL after an internal examination allegedly detected irregularities in the sanction and utilisation of loans extended to companies associated with Chandra. The agency has initiated a criminal investigation into the alleged diversion and misuse of funds.
According to the allegations, the loans were obtained by entities linked to the Essel Group and were subsequently not utilised for the purposes for which they had been sanctioned. The CBI is examining the circumstances surrounding the disbursal of the funds, their subsequent movement and the role allegedly played by the accused.
The development comes against the backdrop of mounting scrutiny over outstanding liabilities associated with Chandra and companies linked to him.
LIC Housing Finance is understood to have an outstanding exposure of around ₹1,322 crore in the matter. A statement issued from Chandra’s office last week had acknowledged the amount while maintaining that the liability had been offered for settlement and that part of the exposure was secured.
The statement had also claimed that borrowers connected with the guarantees had assured Chandra that they would reconcile their accounts with lenders and settle outstanding amounts.
The latest CBI action, however, takes the matter into the domain of criminal investigation, with the agency now examining whether the alleged conduct involved offences relating to cheating, criminal conspiracy, forgery or other financial wrongdoing.
The CBI’s investigation is expected to focus on the manner in which the loans were sanctioned, the representations made to the lender, the ultimate utilisation of the borrowed funds and transactions undertaken by the borrower entities.
Investigators are also likely to examine the financial trail and corporate relationships among the entities involved to determine whether the loan proceeds were diverted or otherwise dealt with in violation of the terms governing their sanction.
The registration of an FIR marks the commencement of the criminal investigation and does not, by itself, establish the guilt of any of the accused.
The FIR has been registered at a time when Chandra is already facing intense scrutiny in separate insolvency proceedings concerning personal guarantees furnished in relation to loans obtained by Essel Group companies.
The National Company Law Tribunal had earlier approved a repayment proposal under which Chandra was to pay ₹6.25 crore against admitted creditor claims exceeding ₹22,000 crore. The decision subsequently came under challenge, with a five-member NCLT bench constituted to reconsider the matter amid objections raised by lenders over the exceptionally low recovery.
LIC Housing Finance has been among the lenders seeking recovery of dues associated with Chandra-linked borrowings. The lender had reportedly recovered only a small fraction of its exposure, further intensifying scrutiny over the outstanding amount and the underlying transactions.
The agency’s investigation will now seek to establish whether the transactions constituted a deliberate scheme to deceive the lender or otherwise cause wrongful loss. Investigators may also scrutinise the role of individuals responsible for the management and operation of the borrowing entities.
The case is significant given the scale of the alleged loss and the involvement of a major housing finance institution. It also places renewed focus on due diligence, end-use monitoring of large corporate loans and the accountability of promoters and guarantors in high-value lending arrangements.
Further action will depend on the evidence gathered during the investigation. The allegations contained in the FIR remain subject to proof in accordance with law, and the accused are entitled to all procedural and legal safeguards available to them.
The post CBI Registers FIR against Subhash Chandra, others over alleged ₹1,322 crore LIC housing finance fraud appeared first on India Legal.