CBI books Educomp Group entities in ₹806.07-cr. bank fraud case
The CBI has booked Educomp Infrastructure & School Management Limited (EISML), Educomp Solution Limited (ESL) and several others in a ₹806.07-crore bank fraud case. In February, it registered a case against ESL and others for allegedly eluding a consortium of ₹1,955 crore.
In the latest FIR, the CBI has also named Shantanu Prakash, Jagdish Prakash, Vijay Kumar Choudhary, Vinod Kumar Dandona, Rajat Khare, Akash Kumar Shah and Krishna Singh as accused. The company had taken funds from a consortium of seven banks.
The alleged fraud was found out during a forensic audit of the transactions made from April 2014 to April 2018. The accused persons draw off the funds via related parties and associate concerns.
EISML, a subsidiary of ESL, provided infrastructure services on long-term lease basis and management solutions to various private schools run by independent trusts and societies. It developed school infrastructure and leased its out to their clients. It earns predetermined yield rentals for the schools’ assets, besides a fixed percentage share in the annual fee revenue of the organisations which are running the schools.
It is alleged that the borrowed funds were used to make investments or provide loans/advances to involved parties. Investments were done and loans extended to the parties that had limited or negligible operations.
In the initial case, ESL and others were accused of cheating a consortium of 13 banks. Among those arraigned were Mr. Shantanu Prakash, Mr. Jagdish Prakash, Mr. Choudhary, Mr. Dandona and subsidiary Edu Smart Services Private Ltd. .
It is alleged that they facilitated diversion of these funds. Loans to the related parties were written off, sales booked without contractual commitment, and forged papers used to get credit facilities. These loans were declared non-performing assets earlier in 016.