Union Bank classifies Srei Equipment Finance and Srei Infrastructure Finance accounts as ‘fraud’
The Union Bank of India has labeled the accounts of Srei Equipment Finance and Srei Infrastructure Finance as “fraud” for “embezzlement”.
The bank will initiate appropriate legal proceedings in this regard in due course, it said in an exchange filing.
“With reference to the bank’s policy on determining the materiality of events or information, we wish to advise…that due to embezzlement, the accounts of SREI Equipment Finance Ltd and SREI Infrastructure Finance Ltd with the bank have been classified as fraud,” he said.
On October 4 last year, the RBI announced the takeover of Srei Infrastructure Finance and Srei Equipment Finance over governance issues and payment defaults.
The central bank has also appointed Rajneesh Sharma, the former chief managing director of Bank of Baroda, as a trustee. On October 11, Sharma issued a public notice asking creditors of Srei Infrastructure Finance to submit their claims after the Kolkata bench of the National Company Law Tribunal (NCLT) ordered the commencement of corporate insolvency proceedings against Srei group company of October 8th.
Last month, Punjab and Sind Bank also said the accounts of these two companies were fraudulent. The lender said the two companies subject to insolvency proceedings are non-performing assets (NPAs).
“It is informed that the accounts NPA – SREI Infrastructure Finance Ltd (SIFL) with outstanding dues of Rs 510.16 crore and Srei Equipment Finance Ltd with outstanding dues of Rs 724.18 crore have been declared as fraud and reported to RBI today according to the regulatory requirement,” Punjab and Sindh Bank said in a regulatory filing.
The lender said it fully provisioned both accounts to regulatory standards.