Mumbai News: CBI Initiates Probe Against ISSL In ₹330 Cr Bank Fraud Case

Mumbai: The Central Bureau of Investigation (CBI) has registered a case against IL&FS Securities Services Limited (ISSL), its officials and others for allegedly causing wrongful loss to Central Bank of India and other banks to the tune of Rs 330.43 crore by way of diversion of disbursed bank funds.

According to the CBI, a written complaint dated November 6 had been received from complainant P.C. Khurana, Deputy General Manager, Central Bank of India, Stressed Assets Management Branch (SAMB), Mumbai against the accused borrower M/s IL&FS Securities Services Limited (ISSL), having registered address at IL&FS House, Andheri (East) and its officials and other unknown public servants & private persons.

Allegations in the complaint

In brief, the allegations are that during 2016 and 2019, the Central Bank of India sanctioned fund-based (working capital facility) and non-fund-based facilities to the borrower company M/s ISSL. The amounts were Rs 50 crore out of a total limit of Rs 250 crore and Rs 75 crore out of a total limit of Rs 900 crore, respectively, under consortium and Multiple Bank Arrangements, as stated by CBI officials.

"Further, M/s ISSL, in conspiracy with other co-accused, cheated the bank by way of diversion of disbursed bank funds in the form of Inter Corporate Deposits (ICDs), providing unsecured loans to IL&FS Employees welfare Trust and invocation of Bank Guarantee in reported fraudulent transaction and thereby caused wrongful loss to Central Bank of India and other banks to the tune of Rs 330.43 crore as on January 31, 2022 and corresponding wrongful gain to themselves," said a CBI official.

"After declaring the account as fraud, it took some time to ascertain the necessary data/information from the other lender (on behalf of whom the complaint is filed), to prepare the complaint, and to take the necessary steps to obtain internal approvals. Hence, the complaint is filed now," the bank stated in its complaint to the CBI.

The CBI has registered a case on charges of criminal conspiracy, cheating and criminal misconduct by a public servant under the relevant sections of the Indian Penal Code and Prevention of Corruption Act.