Source:
It wrote off Rs 1,000 crore of loan exposure to the group.
Many senior executives who were part of IL&FS Financial Services (IFIN) are being investigated for their role in the alleged financial fraud.
The SFIO has accused about 30 individuals and companies, including senior executives, independent directors and auditors of IFIN in its chargesheet.
The SFIO is looking to widen the scope of its probe to other group companies.
ET was the first to report on June 5 that the SFIO had begun investigations into IL&FS Transportation Network and the holding company.
The ministry of corporate affairs on Monday took the unprecedented step of seeking a ban on auditors Deloitte Haskins & Sells and BSR & Co, a KPMG affiliate firm, for their alleged role in helping hide bad loans at IFIN.
https://economictimes.indiatimes.com/markets/stocks/news/loans-to-ilfs-indusind-bank-acted-on-assurance-from-sbi-lic/articleshow/69749547.cms
Loans to IL&FS: IndusInd Bank acted on
assurance from SBI, LIC
The private lender had disclosed loans of Rs
3,000 crore to IL&FS and its group companies.
By
Sachin Dave, Saloni Shukla ET Bureau|
Jun 12, 2019, 08.08 AM IST
Mumbai: Two key investors in
Infrastructure Leasing & Financial Services — Life Insurance Corporation
and State Bank of India — had asked IndusInd Bank NSE -1.01 % to advance a loan
to the group, going out of their way to provide assurances to the lender, just
months before the default crisis hit the group, said two people with direct
knowledge of the matter.
SBI NSE -1.18 % and LIC had requested IndusInd for a loan to IL&FS Group with the assurance that the money would be returned after an upcoming Rs 4,500-crore rights issue, the people said.
Following the assurances, IndusInd Bank lent about Rs 2,000 crore to the IL&FS Group in June 2018, most of which became a non-performing asset after the company went into default just two months later.
SBI NSE -1.18 % and LIC had requested IndusInd for a loan to IL&FS Group with the assurance that the money would be returned after an upcoming Rs 4,500-crore rights issue, the people said.
Following the assurances, IndusInd Bank lent about Rs 2,000 crore to the IL&FS Group in June 2018, most of which became a non-performing asset after the company went into default just two months later.
“Several meetings between
IndusInd Bank and the stakeholders were held in June last year, just two months
before IL&FS went bust.”
“The bank executives were under the impression that everything was on track, especially when the promoters were trying to keep the company afloat,” one person told ET.
According to another person, the bank executives mentioned the meetings in their statement to the Serious Fraud Investigation Office.
“The bank executives were under the impression that everything was on track, especially when the promoters were trying to keep the company afloat,” one person told ET.
According to another person, the bank executives mentioned the meetings in their statement to the Serious Fraud Investigation Office.
The senior executives
accused in the case claim that the assurances by SBI and LIC had led them to
believe that everything was on track and that they must continue with the daily
operations normally.
Emails sent to SBI and LIC did not elicit any response.
“The bank’s exposure to the holding company of the infrastructure group referred to, per terms of sanction, carried some mandatory contractual prepayments from their originally planned rights issue/liquidity support via certain shareholders,” an IndusInd Bank spokesperson said.
The private lender had disclosed loans of Rs 3,000 crore to IL&FS and its group companies. It made a 70 per cent provisioning on the loans to the holding company and created a 25 per cent provision cover on its exposure to the group’s special purpose vehicles.
Emails sent to SBI and LIC did not elicit any response.
“The bank’s exposure to the holding company of the infrastructure group referred to, per terms of sanction, carried some mandatory contractual prepayments from their originally planned rights issue/liquidity support via certain shareholders,” an IndusInd Bank spokesperson said.
The private lender had disclosed loans of Rs 3,000 crore to IL&FS and its group companies. It made a 70 per cent provisioning on the loans to the holding company and created a 25 per cent provision cover on its exposure to the group’s special purpose vehicles.
It wrote off Rs 1,000 crore of loan exposure to the group.
Many senior executives who were part of IL&FS Financial Services (IFIN) are being investigated for their role in the alleged financial fraud.
The SFIO has accused about 30 individuals and companies, including senior executives, independent directors and auditors of IFIN in its chargesheet.
The SFIO is looking to widen the scope of its probe to other group companies.
ET was the first to report on June 5 that the SFIO had begun investigations into IL&FS Transportation Network and the holding company.
The ministry of corporate affairs on Monday took the unprecedented step of seeking a ban on auditors Deloitte Haskins & Sells and BSR & Co, a KPMG affiliate firm, for their alleged role in helping hide bad loans at IFIN.
