CBI Files Case Against IL&FS Energy, Ex-Directors in ₹212 Crore Canara Bank Fraud Probe
New Delhi, October 25, 2026: The Central Bureau of Investigation has registered a case against Mumbai-based IL&FS Energy Development Company Limited (IEDCL) and its former managing directors and directors over allegations that the company caused a wrongful loss of ₹212.34 crore to Canara Bank by diverting loan funds sanctioned for specified infrastructure projects.
The FIR was lodged on October 21, 2026, on the basis of a complaint from Canara Bank’s Circle Office in Bandra (East), Mumbai. The case names the company, its managing directors and 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 alleged conspiracy involved securing two major credit facilities from the bank: a term loan of ₹100 crore from the erstwhile Syndicate Bank, now merged with Canara Bank, through 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 sanctioned as a short-term loan for 12 months under a Multiple Banking Arrangement and was meant to fund Solar Park, Wind Energy and Solar Energy projects being implemented through the company’s various project entities.
The USD 50 million loan 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 carried out by Canara Bank concluded that the borrowed money was not used for the sanctioned purposes. Instead, it was allegedly diverted for purchases and activities unrelated to the approved end-use. The audit found that the funds were routed through group and associate entities, with inadequate supporting documents and questionable accounting treatment. It also alleged that the company misrepresented its financial position to mask the true state of its finances, leading to the estimated wrongful loss of ₹212.34 crore to the bank.
After the case was registered, CBI teams carried out searches on or around October 24 at premises linked to the company and its directors in Mumbai, Delhi, Noida and other locations. During the searches, investigators 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 probe.
The agency said the investigation will now focus on tracing the final destination of the diverted funds, establishing the role of the named individuals and the unidentified public servants, and determining the full scope of the alleged conspiracy.
IL&FS Energy Development Company Limited is a subsidiary of the Infrastructure Leasing & Financial Services (IL&FS) group. The group’s collapse in 2018 triggered one of India’s biggest corporate debt crises and led to multiple later probes into its financial affairs.
(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.)
