IL&FS Energy: CBI registers case, Canara Bank alleges loss

The Central Bureau of Investigation said it registered a case on 21 October 2026 against IL&FS Energy Development Company Limited and five of its managing directors or directors after a complaint from Canara Bank alleging a wrongful loss of Rs 212.34 crore. The agency said it subsequently searched premises linked to the executives in Mumbai, Delhi, Noida and other locations.

The complaint came from Canara Bank’s Circle Office in Bandra (East), Mumbai, according to the CBI’s statement. The agency named Sunil Wadhwa, Anoop Seth, Hari Sankaran, Ramesh Chandra Bawa and Arun Kumar Saha as accused, alongside the company, unidentified public servants and unidentified private individuals.

The CBI said the case concerns alleged criminal conspiracy to cheat the bank and offences under the Prevention of Corruption Act, the law dealing with corruption involving public servants. Its statement does not specify the statutory sections invoked or identify the public servants whose roles are being investigated. Registration of the case is an investigative step, not a finding of guilt.

Two loan facilities under investigation

According to the CBI, the accused allegedly conspired to obtain a Rs 100 crore term loan from the erstwhile Syndicate Bank’s Large Corporate Branch in Mumbai and USD 50 million from its London branch. Syndicate Bank is now merged with Canara Bank.

The agency alleged that the company did not use the money for the purposes for which the loans had been sanctioned. Instead, it allegedly diverted and siphoned off funds through associate companies, causing the loss cited in the complaint.

The Rs 212.34 crore figure is the alleged wrongful loss to Canara Bank, not a combined statement of the original loan amounts. The CBI’s statement does not explain how that loss was calculated or provide a breakdown between the two facilities.

Mint, reporting details from the First Information Report, or FIR, gave a more specific account of the intended uses of the money. An FIR records the allegations on which a criminal investigation begins.

According to Mint’s account of the FIR, Syndicate Bank sanctioned the Rs 100 crore facility for 12 months under a multiple banking arrangement, involving borrowing from more than one bank. The money was intended to finance solar park, wind energy and solar energy projects implemented through project companies.

Mint described this facility as a short-term loan, while the CBI’s statement called it a term loan. Both accounts identified the same rupee amount and originating bank.

The London branch’s USD 50 million facility was intended for onward lending to existing and new special purpose vehicles in the infrastructure sector, Mint reported, citing the FIR. These are entities established for particular projects. The facility also permitted other uses under the Reserve Bank of India’s applicable External Commercial Borrowings guidelines, which govern overseas borrowing.

Allegations about accounting and fund transfers

Mint reported that a forensic audit conducted by Canara Bank found alleged diversion of borrowed money to purchases and activities outside the sanctioned purposes. A forensic audit examines financial records for possible irregularities.

According to Mint’s account of the FIR, funds were routed through group and associate entities and other transactions, with allegations of inadequate supporting documents and questionable accounting treatment. Mint also reported that the CBI accused the company of misrepresenting its finances to conceal its financial position.

These remain allegations in the investigation. Neither the CBI statement nor Mint’s report included a response from the company or the named executives.

The CBI said its searches yielded bank documents, deposit slips, mutual fund portfolio documents, records concerning directors’ bank accounts and properties, and company ledgers. It described the seized material as incriminating and relevant to the investigation, but did not set out individual transactions or explain what each record allegedly demonstrated.

Separate borrowing from another bank

Business Standard has reported on a separate CBI case involving IL&FS Energy Development Company and borrowing from the erstwhile United Bank of India, subsequently part of Punjab National Bank. That report concerned allegations of misuse of sanctioned credit, diversion of loan funds and transfers of sale proceeds to related companies.

According to the CBI account carried by Business Standard, United Bank of India sanctioned a Rs 100 crore term loan on 28 December 2017. The account became a non-performing asset, a loan classified as troubled because of repayment failures, on 31 December 2018.

Those details concern a different lender and complaint; they do not establish the allegations in the Canara Bank case.

In the Canara Bank investigation, the CBI said it was continuing to trace how the loan money was ultimately used, establish the extent of the alleged conspiracy and identify the roles of the individuals involved, including public servants and private persons.