ED Registers ECIR Against Essel Group Chairman Subhash Chandra In ₹1,322-Crore LIC Housing Finance Loan Fraud Case

Mumbai: The Enforcement Directorate (ED) has registered an Enforcement Case Information Report (ECIR) against Essel Group chairman Subhash Chandra in connection with an alleged Rs 1,322-crore loan fraud involving LIC Housing Finance Ltd (LICHFL), days after the Central Bureau of Investigation (CBI) registered an FIR against him and eight others, people familiar with the Investigation said.

ED To Examine Alleged Diversion And Misappropriation Of Loan Funds

The ECIR has been registered following the CBI's investigation into allegations that loans sanctioned by LICHFL to four Essel Group-linked companies were obtained using allegedly inflated financial documents. The ED is expected to examine the alleged diversion and misappropriation of the loan funds.

Zee Entertainment Enterprises Ltd (ZEEL) on Sunday clarified that the ECIR relates to Chandra in his personal capacity and certain promoter entities, and has no bearing on the company’s operations.

ZEEL Spokesperson Clarifies Company's Position

"The matters are pertaining to Dr. Subhash Chandra and the promoter entities and have no bearing on 'Z' or its operations in any manner," a Zee Entertainment spokesperson said.

Earlier in August, the CBI registered the FIR, following a complaint by LICHFL over two loan facilities aggregating Rs 980 crore sanctioned in 2018 to four Essel Group-linked companies. The lender has alleged that the loans were secured using inflated net-worth certificates submitted by Chandra, who had personally guaranteed the facilities.

CBI Investigates Alleged Cheating, Conspiracy And ₹1,322-Crore Loss

According to the CBI FIR, Chandra and other accused allegedly misrepresented his financial worth to induce the lender to sanction the loans. The agency is investigating allegations of criminal conspiracy, cheating, criminal breach of trust and misappropriation of loan funds. LICHFL has pegged its alleged wrongful loss at approximately Rs 1,322.39 crore following defaults.

The complaint refers to two net-worth certificates submitted in 2018. A certificate dated March 28, 2018, valued Chandra's net worth at $6,197.62 million (approximately Rs 59,113.21 crore) as of March 31, 2017. Another certificate, issued on July 6, 2018, put his net worth at Rs 40,562 crore.

The FIR names Chandra and eight others, besides unidentified persons and public servants. The CBI is also examining whether any government officials facilitated the alleged fraud and the resulting loss to the public exchequer.

LICHFL has further alleged that Chandra, in collusion with the borrower companies and their directors, induced it to disburse the loans through false and inflated documents. The lender has alleged that the funds were subsequently misappropriated and assets stripped to frustrate recovery efforts.

The ECIR is an internal document through which the ED formally initiates a money laundering investigation under the Prevention of Money Laundering Act (PMLA). Unlike an FIR, it is not mandatorily required to be shared with the accused. A predicate offence is necessary for the ED to initiate a money laundering probe.

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