The Serious Fraud Investigation Office (SFIO) which has been investigating the debt-ridden Infrastructure Leasing and Financial Services (IL&FS) group has listed lapses in 13 loans worth around Rs 1,080 crore granted by it to ABG group in its probe report.
The said loans include a personal loan to the tune of Rs 29 crore to ABG group promoter Rishi Agarwal's wife Anupama Agarwal, all granted on the instructions of the top management of IL&FS. The infrastructure financier did not even follow due process while awarding these loans, the report said.
The SFIO has termed some transactions as an "evergreening exercise" whereby the ABG group used some money taken on loan from IL&FS Financial Services (IFIN) to prevent its accounts from turning into Non-Performing Assets (NPAs), the Business Standard reported.
IFIN since 2010 has been extending credit facilities to the ABG group which is owned and controlled by Rishi Agarwal with the combined exposure being around Rs 1,080 crore. This amount was classified as NPA in September 2018.
The Reserve Bank of India (RBI) in its report for FY15 had red-flagged insufficient security cover in terms of exposure to ABG International, and Onaway Industries during FY17.
After RBI pointed out these discrepancies, Deepak Pareek, Chief Operating Officer (COO) of IFIN sent an e-mail to Ravi Parathasarathy, Arun Saha and Hari Sankaran on November 20, 2017, (who were all part of the erstwhile top management of IL&FS), copying Ramesh Bawa (also a part of the same team) too in the mail, the report added.
The SFIO also learned that money was rotated within these 13 loan accounts. Case in point, PFS Shipping India (Part of ABG Group) was granted a loan of Rs 52 crore. A part of this loan was repaid by the ABG Cement Holdco Pvt Ltd which had received Rs 65 crore loan from IFIN.
While another Rs 9 crore was paid out of Rs 105 crore given to ABG International Pvt Ltd. This amount was again repaid by ABG International (ABGIL) from Rs 220 crore loan granted to Onaway Industries, which is another ABG company. Both PFS Shipping and ABG Cement Holdco are the fully owned subsidiaries of ABG International.
The report further said that Rishi Agarwal was directly in touch with Parthasarathy through the mail. The SFIO chargesheet also elaborated on Bawa's involvement in granting loans to various ABG Group entities. "The whistleblower in its letter dated March 3, 2017, has pointed out the connivance of the management of IFIN and also of Ravi Parthasarathy and Ramesh Bawa to release the security cover in the case of ABG," said the SFIO.