The CBI on Tuesday conducted searches in connection with the case against Educomp Solutions Limited (ESL) and others for allegedly cheating an SBI-led consortium of 13 banks to the tune of ₹1,955 crore.
Those named in the case are the company, its managing director Shantanu Prakash, guarantor Jagdish Prakash, subsidiary Edu Smart Services Private Limited and directors Vijay Kumar Choudhary and Vinod Kumar Dandona.
“The searches were carried out at eight places in Delhi, Dehradun and Gurugram,” said a CBI official.
According to the FIR, the fraud was detected during a forensic audit of the report submitted by the company. The accused persons had falsified the accounts and forged the documents to “gain unlawfully” at the cost of the banks’ funds.
The ESL, incorporated in 1994, was the flagship company of the Educomp group. Edu Smart Services, Educomp Infrastructure & School Management, Educomp School Management Limited and Educomp Infrastructure Services Private Limited were the other major companies of the group, said the FIR.
The flagship company’s primary operations were to create, develop and provide digital educational content in classrooms. It operated under brand ‘Smartclass’ and Information and Communications Technology and vocational education under brand ‘Edureach’.
It entered into a tripartite agreement with schools for smart classes. It also supplied hardware and digital content to its subsidiary on a tripartite agreement basis. The subsidiary securitised the contracts and raised loans from various banks, passed on the loan proceeds to the ESL as part of consideration for the hardware and content.
The balance was paid to the ESL over the contract period, typically of five years, as and when received from the respective schools. Later, the subsidiary’s receivables were transferred to the ESL.
The accused facilitated diversion of funds. Loans to the related parties were written off, sales were booked without contractual obligations, forged documents were used to get the credit facilities sanctioned and siphon off funds, alleged the banks.
The outstanding as on May 31, 2017, was ₹1,955 crore against the loans, which were declared non-performing assets in 2016.
