The CBI has booked Educomp Infrastructure & School Management Limited (EISML), Educomp Solution Limited (ESL) and others in a ₹806.07-crore bank fraud case. In February, it registered a case against ESL and others for allegedly cheating a consortium of ₹1,955 crore.
In the latest First Information Report, 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 borrowed funds from a consortium of seven banks.
The alleged fraud was detected during a forensic audit of the transactions made from April 2014 to April 2018. The accused persons siphoned 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 schools run by independent trusts and societies. It developed school infrastructure and leased its out to the clients. It earns predetermined yield rentals for the schools’ assets, besides a fixed percentage share in the annual fee revenue of the organisations running the schools.
It is alleged that the borrowed funds were used to make investments or provide loans/advances to related parties or subsidiaries. Investments were made and loans extended to the parties that had limited or negligible operations.
In the first 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 Limited.
It is alleged that they facilitated diversion of funds. Loans to the related parties were written off, sales booked without contractual obligations, and forged papers used to get credit facilities. The loans were declared non-performing assets in 2016.
