IL&FS Engineering Faces Scrutiny: Bank Labels Loan as Suspicious

IL&FS Engineering Services has received a show cause notice from Indian Overseas Bank over its loan account being classified as a suspicious fraud account. The account is related to transactions worth Rs 123 crore following a forensic audit conducted by Grant Thornton India, spotlighting irregularities.

IL&FS Engineering Services has been issued a show cause notice by Indian Overseas Bank due to the classification of one of its loan accounts as a suspicious fraud. Despite a lack of quantified irregularities, the sum involved in the matter stands at Rs 123 crore.

The discrepancy was first identified by Grant Thornton India in their forensic audit report, prompting reporting to the Ministry of Corporate Affairs for necessary action. Following directives from NCLT in October 2018, a special audit looked into high-value transactions by IL&FS Ltd, revealing considerable concerns.

The controversy is part of a broader IL&FS crisis, which has led to reclassification of several loan accounts as fraudulent. Efforts to resolve liabilities with secured lenders are ongoing under a government-approved framework, with shares of IL&FS Engineering witnessing a 2.89% surge to close at Rs 37 per share on BSE.

(With inputs from agencies.)