Axis Bank terms reports of Rs 44,000 crore loan to SREI Group as inaccurate & baseless

Axis Bank on Tuesday in its clarification on a claim by Australia-based news portal, Scams Breaking, on exposure to Kolkata-based SREI Infrastructure said the report is grossly inaccurate and baseless insofar as the bank's outstanding to SREI entities or underwriting practices and processes are concerned.

The private lender in a regulatory filing said, its outstanding loan to SREI entities and SREI Group (including SERI entities) stood at Rs 411 crore and Rs 800 crore, respectively, as on December 14, 2020.

The Scams Breaking in a press statement on December 14, 2020, claimed the private sector lender provided loans to Kolkata-based SREI Infrastructure to the tune of Rs 44,000 crore without any due diligence and verification of end-use of the loan amount.

The portal in a press statement on December 14, 2020, said, "As per the records maintained by MCA21 (A Ministry of Corporate Affairs website) the Axis Bank etc. have provided loans to SREI Infrastructure and Finance Limited to the tune of Rs 44,000 crores without any due diligence and verification of end-use of the loan amount. This loan amount has been disbursed with sham receivables including related party transactions."

The Bank has complied with its underwriting practices and approval processes for any exposure taken in relation to SREI Equipment Finance Limited and SREI Infra Finance Limited (collectively "SREI entities"). Axis Trustee Services acts in its fiduciary capacity as a trustee and/or custodian and charges registered by it are not a reflection of the exposure of Axis Bank," it said.

The bank further stated that it is evaluating all remedies available to it against the author and publisher of the report.

The portal in its report alleged that it has unearthed Rs 16,000 crores scam which has been commissioned at Kolkata by Kanoria Brothers. The forensic and legal due diligence has revealed various shocking facts about the scams. It said, the Kanoria brothers in siphoning off money to the tune of Rs 16,000 crores into illegitimate and fake accounts. It added, "Huge amounts of money have been routed through a transfer of funds to shell entities under a false pretext, fraudulent documentation, creation of fake companies which existed only on paper etc which finally make its way to an SREI account. Through a well-planned strategy, the Kanoria family has smoothly funnelled over Rs. 16000 crores, one of the largest so far into their account."

The Kanoria Family runs three main businesses namely SREI Infrastructure Finance Limited (SREI), SREI Equipment Finance Limited (SEFL) and India Power Corporation Limited (IPCL). The SREI entities are funded by various banks while the IPCL is funded by Government institutions like Power Finance corporation etc.