New Delhi, October 25, 2026: The Central Bureau of Investigation (CBI) has registered a case against Mumbai-based IL&FS Energy Development Company Limited (IEDCL) and its former managing directors and directors for allegedly causing a wrongful loss of ₹212.34 crore to Canara Bank through diversion of sanctioned loan funds. Searches were conducted at multiple premises linked to the accused in Mumbai, Delhi, Noida and other locations, leading to the seizure of incriminating documents.
The First Information Report (FIR) was registered on October 21, 2026, on a complaint lodged by Canara Bank’s Circle Office in Bandra (East), Mumbai. The accused named in the case are the company and its Managing Directors/Directors along with unknown public servants and private persons. They have been booked for criminal conspiracy, cheating and offences under the Prevention of Corruption Act.
According to the CBI, the accused allegedly conspired to obtain a term loan of ₹100 crore from the erstwhile Syndicate Bank (now merged with Canara Bank) at its Large Corporate Branch in Mumbai, and a foreign currency term loan of USD 50 million from the bank’s London branch. The ₹100 crore facility was a short-term loan for 12 months under a Multiple Banking Arrangement, sanctioned to fund Solar Park, Wind Energy and Solar Energy projects being implemented through the company’s various project companies.
The USD 50 million facility was intended for onward lending to the borrower’s Special Purpose Vehicles for existing and new infrastructure projects, or for other end-uses permitted under the Reserve Bank of India’s External Commercial Borrowings guidelines.
A forensic audit conducted by Canara Bank found that the borrowed funds were not utilised for the sanctioned purposes. Instead, they were diverted and deployed for purchases and activities unrelated to the approved end-use. The funds were routed through group and associate entities, with inadequate supporting documentation and questionable accounting treatment. The audit also alleged that the company misrepresented its financials to conceal its actual financial position, resulting in the estimated wrongful loss of ₹212.34 crore to the bank.
Following registration of the case, CBI teams conducted searches on or around October 24 at premises associated with the directors and the company in Mumbai, Delhi, Noida and elsewhere. Officials seized bank transaction documents, deposit slips, mutual fund portfolio records, details of bank accounts and properties belonging to the directors, company ledgers and other financial records relevant to the investigation.
Further investigation is underway to trace the ultimate end-use of the diverted funds, establish the roles of the named individuals and unknown public servants, and determine the full extent of the alleged conspiracy. IL&FS Energy Development Company Limited is a subsidiary of the Infrastructure Leasing & Financial Services (IL&FS) group, whose 2018 collapse led to one of India’s largest corporate debt crises and multiple subsequent probes into the group’s financial dealings.
(This report is based on official CBI statements and contemporaneous reporting by PTI, The Times of India and other agencies. The allegations remain subject to investigation and judicial process.)
