CBI books Essel Group chairman Subhash Chandra, others over alleged ₹1,322 crore LICHFL loan loss

New Delhi: The Central Bureau of Investigation has registered an FIR against Subhash Chandra and eight others in connection with alleged inflation of the Essel Group chairman’s net worth to obtain loans from LIC Housing Finance (LICHFL), which caused it a loss of more than ₹1,322 crore, said people with knowledge of the matter.

Separately, the Directorate of Enforcement will launch a money laundering probe and register an Enforcement Case Information Report under relevant provisions of the Prevention of Money Laundering Act against Chandra and the co-accused, according to people in the know.

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LICHFL alleged in its complaint that the loans were sanctioned on the basis of the disputed net worth certificates submitted by Chandra and that the subsequent conduct of the borrowers was aimed at frustrating recovery.

It also claimed that Chandra submitted two net worth certificates in March and July 2018 that were used to secure approval and disbursal of two loans totalling ₹980 crore.

Chandra, Pankaj Suroliya, Amish Pandya, Rajeev Dholakia and other entities have been named as accused. The case relates to credit facilities extended in 2018 to companies associated with Essel Group. The allegations include criminal conspiracy, cheating, criminal breach of trust and criminal misconduct.

LICHFL’s complaint is part of the CBI first information report (FIR) registered last Monday.

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The FIR invoked Section 120B, read with sections 409 and 420 of the Indian Penal Code as well as provisions of the Prevention of Corruption Act.

Both CBI and ED are likely to soon issue summons to the accused for questioning. Among the nine accused booked by CBI are “unknown others and unknown public servants.” The agency will also zero in on the suspected involvement of government officials who facilitated the alleged loss to the public exchequer, the people said.

Central to the case is what LICHFL described as a massive discrepancy between Chandra’s declared net worth when the loans were sanctioned in 2018, and his subsequent statements during personal insolvency proceedings.

According to the complaint, a net worth certificate dated March 28, 2018, certified Chandra’s net worth as $6,197.62 million (about ₹59,113.21 crore) as of March 31, 2017. A second certificate, issued on July 6, 2018, put his net worth at ₹40,562 crore.

LICHFL said these financial declarations formed the basis for sanctioning and disbursing the loans.

The lender said it subsequently came across a sharply different position attributed to Chandra during proceedings relating to his personal insolvency under the Insolvency and Bankruptcy Code. The complaint alleged that Chandra denied having the net worth reflected in the certificates earlier submitted to LIC Housing Finance. It further said he claimed his net worth in 2024 was ₹31.79 crore, and that it had not exceeded ₹40,000 crore even in 2017-18.

LICHFL made the contradiction a key element of its criminal complaint, alleging that documents showing a substantially higher net worth were submitted to induce the lender to loan.

One credit facility of ₹500 crore was extended to Vasant Sagar Properties Pvt Ltd, with Pan India Infraprojects Pvt Ltd as coborrower. The facility was described as a takeover, and a top-up loan for business expansion was backed by a continuing personal guarantee executed by Chandra on March 28, 2018.

The second facility, amounting to ₹480 crore, was extended to Digital Subscriber Management and Consultancy Services Pvt Ltd, with Spirit Infrapower and Multiventures Pvt Ltd as coborrowers, under a rental-discounting arrangement. Chandra executed the continuing guarantee for this facility on August 10, 2018. Both accounts subsequently went into default, according to the complaint submitted to CBI.

The complaint said Chandra and the borrower companies acted in collusion and that the loan funds were misapplied. It further claimed that assets were stripped or otherwise dealt with in a manner that sought to frustrate the lender’s ability to recover its dues. The criminal case has been filed at a time when LIC Housing Finance also figures among the major creditors in Chandra’s ongoing personal insolvency proceedings. The company has an admitted claim of about ₹1,322.39 crore against Chandra in those proceedings.

A repayment plan associated with the insolvency process had proposed payment of only about ₹38.09 lakh to the housing finance company, triggering opposition from LICHFL and other creditors. The insolvency proceedings have separately been a matter of litigation before the National Company Law Tribunal.

The complaint emphasised a significant flight risk, stating that the accused persons had publicly disclosed their intention to leave India. LICHFL urged immediate action to trace the proceeds of the loans and prevent their departure. Consequently, CBI registered a regular case to initiate a formal criminal investigation under stringent legal provisions.