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CBI books Subhash Chandra in alleged Rs 1,322 crore loan fraud
Probe centres on LICHFL loans, guarantees and disputed net worth certificates
MUMBAI: A loan trail has now led straight to the courtroom. The Central Bureau of Investigation (CBI) has registered a case against Essel Group chairman Subhash Chandra and others over an alleged Rs 1,322 crore fraud involving LIC Housing Finance Ltd (LICHFL).
According to the complaint, the case relates to loan facilities sanctioned by LICHFL to companies for business expansion and rental securitisation, with Chandra providing continuing guarantees for the borrowings.
One of the facilities was a Rs 500 crore loan to Vasant Sagar Properties Pvt. Ltd., with Pan India Infra Projects Pvt. Ltd. as co-borrower. The facility was sanctioned as a Home Entity Loan for takeover and top-up purposes and was backed by a continuing guarantee executed by Chandra on March 28, 2018.
LICHFL also sanctioned a Rs 480 crore Rental Discounting facility to Digital Subscriber Management and Consultancy Services Pvt. Ltd., with Spirit Infra Power and Multiventures Pvt. Ltd. as co-borrower. Chandra signed a continuing guarantee for this facility on August 10, 2018.
The complaint alleges that the lending decisions were, among other factors, based on net worth certificates submitted by Chandra. A certificate issued by DJM & Co. on March 28, 2018 put his net worth as of March 31, 2017 at US$6,197.62 million, or approximately Rs 59,113.21 crore.
A separate certificate issued by MPJ & Co., Chartered Accountants, on July 6, 2018 placed his net worth at Rs 40,562 crore, according to the complaint.
Both the Vasant Sagar and Digital loan facilities subsequently went into default, the complaint alleges.
The matter later resurfaced during proceedings under the Insolvency and Bankruptcy Code, 2016, concerning Chandra’s personal insolvency resolution. The complaint alleges that Chandra denied having the net worth reflected in the certificates submitted to LICHFL for obtaining approval and disbursal of the loans.
During the insolvency proceedings, Chandra stated that his net worth in 2024 was Rs 31.79 crore and that even during 2017-18, it had not exceeded Rs 40,000 crore, according to the complaint.
The CBI case comes against the backdrop of a separate controversy over Chandra’s personal insolvency resolution. On August 25, an NCLT order approved a plan allowing him to settle admitted claims of Rs 22,006.57 crore by paying around Rs 6.5 crore.
LICHFL, which had an admitted claim of Rs 1,322.39 crore, opposed the plan and was set to receive only around Rs 38.09 lakh under it.
The exceptionally low recovery triggered further scrutiny, with a five-member NCLT bench staying the order on September 1, citing the absence of a clear majority in the earlier proceedings.
The CBI investigation now adds another layer to a financial dispute that has already moved between lenders, insolvency proceedings and the courts. At the heart of the case is a question with a very large number attached: how did net worth figures running into tens of thousands of crores feature in loans that eventually ran into default?
