Indian Overseas Bank Issues Show-Cause Notice To IL&FS Engineering On Loan Fraud Concerns
Indian Overseas Bank Issues Show-Cause Notice To IL&FS Engineering On Loan Fraud Concerns
The matter is being handled under the group resolution framework approved by the NCLAT
IL&FS Engineering Services has been issued a show-cause notice by the Indian Overseas Bank on the classification of its suspicious Rs.123 crore loan fraud account.
The issue was raised during a forensic audit by Grant Thornton India and reported to the Ministry of Corporate Affairs for appropriate action. It is being handled under the group resolution framework.
However, the lender, IL&FS has not quantified the irregularities
On 1 October 2018, the National Company Law Tribunal (NCLT) directed the reconstitution of the Audit Committee of the new Board comprising nominated directors of the Corporate Affairs Ministry.
The ‘Forensic Audit’ was held for high-value transactions undertaken by IL&FS and some of its group companies including IL&FS Engineering through Grant Thornton.
Thus, as a natural corollary of the IL&FS crisis, the loan accounts, maintained with various secured lenders including the Indian Overseas Bank by the company, a subsidiary of IL&FS, were classified as fraud.
The company's liabilities to all secured lenders were approved by the National Company Law Appellate Tribunal (NCLAT). It is being implemented under the supervision of retired Supreme Court judge Justice DK Jain.
