ED opens money laundering probe against Subhash Chandra in Rs 1,322 crore loan case

Mumbai: The Enforcement Directorate (ED) has initiated a case against Essel Group chairman Subhash Chandra in connection with an alleged ₹1,322 crore loan fraud involving LIC Housing Finance Ltd.

According to people familiar with the development, the ED filed an Enforcement Case Information Report (ECIR) against Chandra after the Central Bureau of Investigation registered an FIR against him and eight others.

The ECIR is an internal document at the ED to formally initiate an investigation, but is not mandatorily required to be shared with the accused. A predicate case filed by the police or other investigative agencies is a must for the ED to probe money laundering.


Zee Entertainment Enterprises Ltd, which is part of the Essel Group, said on Sunday that the ECIR related to Chandra in his personal capacity and certain promoter entities, and had no bearing on the listed company's operations.

The CBI registered the FIR in August based on a complaint by LIC Housing Finance over two loan facilities aggregating ₹980 crore sanctioned in 2018 to four Essel Group-linked companies. The lender alleged that the loans were secured using inflated net-worth certificates submitted by Chandra, who personally guaranteed the facilities. The lender has pegged its alleged wrongful loss due to loan defaults at ₹1,322.39 crore. The CBI is investigating allegations of criminal conspiracy, cheating, criminal breach of trust and misappropriation of loan funds against the accused.

The complaint refers to two net-worth certificates submitted in 2018. A certificate dated March 28, 2018, put Chandra's net worth nearly $6.2 billion as of March 31, 2017. A second certificate, issued on July 6, 2018, valued his net worth at ₹40,562 crore.

The CBI is also examining whether any government officials facilitated the alleged fraud and the resulting loss to the public exchequer.

ET had reported in September, citing people familiar with the matter, that both the CBI and the ED were likely to summon the accused for questioning.

LIC Housing Finance alleged that Chandra, in collusion with the borrower companies and their directors, induced it to disburse the loans by submitting false and inflated documents. It alleged that the funds were subsequently misappropriated and assets stripped to prevent recovery efforts.