Delhi-based Era Infra Engineering Ltd (EIEL), which is undergoing insolvency proceedings at National Company Law Tribunal (NCLT) after it turned a bad loan in May 2016, has turned out to be a curious case for further investigations.
According to an exclusive article by DNA Money, the company has defied almost every borrowing norm – from fudging financial numbers, using a wrong accounting method to false billing. 18 lenders of the company chose to ignore its overstated trade receivables, which were given as collateral against the sanctioned loan.
The company is also believed to have created bogus debtors in the name of provisional debtors and claims. The auditor has mentioned that the majority portion of these trade receivables was about the work done by its own associate companies.
Lenders of the company seem to have ignored every possible chance of recovery of the huge debt that has now turned a bad asset. The lead lender in the consortium, Union Bank of India, overlooked its own special investigative audit that raised several concerns over the business and financial handling of the company before approving the corporate debt restructuring proposal. Interestingly, IFCI had declared associates companies of Era group as wilful defaulters, in 2016, on the sale of mortgaged property without lenders’ approval.
Surely, this makes a clear case for a serious fraud investigation.