Essel Group chairman Subhash Chandra, already tangled in a Rs 22,000 crore liability dispute at the NCLT, now faces a fresh legal headache. The CBI has opened an investigation into an alleged Rs 1,322 crore loan fraud after LIC Housing Finance Limited filed a complaint, with an FIR registered on August 31.
What the complaint alleges
LIC Housing Finance has named the borrower companies as well as their directors in its police complaint. The lender claims fabricated net worth documents were used to secure the loans. Based on these allegations, the CBI has booked the accused under sections covering criminal conspiracy, cheating and criminal breach of trust, among others.
The first loan: Rs 500 crore
In March 2018, LIC Housing Finance extended a Rs 500 crore loan to Vasant Sagar Properties Private Limited and Pan India Infraproject Private Limited to help expand their business. The entire amount was sanctioned against Subhash Chandra's personal guarantee.
A second loan followed in August 2018
Months later, in August 2018, the lender disbursed another Rs 480 crore under a rental discounting facility to Digital Subscriber Management and Consultancy Services Private Limited and Spirit Infrapower and Multiventures Private Limited. This loan, too, carried Chandra's personal guarantee.
Conflicting net worth claims
According to the complaint, the first loan was sanctioned partly on the strength of a net worth certificate submitted by Chandra, which put his wealth at around $6.2 billion, roughly Rs 59,000 crore, as of March 31, 2017. By the time the second loan was approved, his net worth was stated to be close to Rs 40,562 crore.
Both accounts have since defaulted
LIC Housing Finance says both loans are now in default, with Rs 570.50 crore outstanding on the Vasant Sagar facility and Rs 507.25 crore outstanding on the loan to the Digital Subscriber Management entity. After the default, Chandra distanced himself from the net worth figures he had once declared. In 2024, he stated his net worth stood at just Rs 31.79 crore, and claimed it had never crossed Rs 40,000 crore even back in 2017-18.
Allegations of forged paperwork
LIC Housing Finance alleges Chandra worked with the directors and officials of the borrower companies to persuade it to lend the money. It further alleges the net worth figures were inflated and backed by fake documents, and that the funds were misused after disbursal.
Who has been named in the case
Besides Subhash Chandra, the CBI has named Vasant Sagar Properties and its director Pankaj Suroliya, Pan India Infraproject, Digital Subscriber Management and Consultancy Services and its director Amish Pandya, and Spirit Infrapower and Multiventures and its director Rajiv Dholakia, along with other unidentified employees. The investigation is at an early stage.
