Srei Group in trouble as lenders tighten screws
The consortium of the lender banks headed by UCO Bank is also gearing up to get a forensic audit on the accounts of the group done by KPMG, sources say
SREI Infrastructure shares locked in upper circuit on investment proposal for subsidiary
Over 200 officials at various levels left the group after lenders took control of the cash flows
The lenders of the Kolkata-headquartered Srei Group have landed the non-banking finance company into great trouble in more ways than one. The latest move by the lender banks has fuelled large scale exodus from the company. More than 200 officials at various levels including at the high level have left the group recently, out of a total strength of nearly 1500. Many more are on their way out.
In the wake of the non-payment and default, the lender banks had taken control of the cash flow and income-expenditure of the company since December. Subsequently, the lender banks had also put an upper cap of Rs 50 lakh per annum of the emoluments of the high officials of the company. This in turn has fuelled this exodus, leaving the company in the lurch.
The consortium of the lender banks headed by UCO Bank is also gearing up to get a forensic audit on the accounts of the company done by KPMG, sources in lender banks said.
That's not all. Even the Reserve Bank of India had conducted a thorough 'Special Audit" on the entire accounts of the Srei Group. The apex bank is yet to make that report public. However, the lender banks have asked for a copy of that special audit from the RBI. Interestingly, the lender banks need to have a third party audit done, in order to restructure the loan of the company.
Significantly, two of the Srei group companies- Srei Equipment Finance and Srei Infrastructure Finance - together have a total loan of Rs 28,000 crore. Of this, total bank loans stand at Rs 18,000 crore. The company had raised the rest from ordinary and foreign investors through issue of debenture bonds. The company is learnt to have faltered on payment of interests on that front as well.
Significantly, CARE Ratings and Acuite Ratings have brought down ratings of two of these Srei Group companies and included them in the 'default' category. This has further prompted the lender banks to take immediate and stern actions.
