CBI Registers FIR Against IL&FS Energy and Directors Over Rs 212 Crore Canara Bank Fraud

The Central Bureau of Investigation has registered an FIR against IL&FS Energy Development Company Limited and five of its directors over an alleged Rs 212.3 crore fraud on Canara Bank, the agency said on October 24. The Times of India reported that searches were carried out in Delhi, Mumbai and Noida the same day.

The FIR and the Loans at the Centre

The case was registered on October 21 after a formal complaint from Canara Bank's Circle Office in Bandra (East), Mumbai. The accused are named as IL&FS Energy Development Company Limited and its managing directors and directors Sunil Wadhwa, Anoop Seth, Hari Sankaran, Ramesh Chandra Bawa and Arun Kumar Saha, along with unknown public servants and private individuals.

According to the CBI, the accused entered into a criminal conspiracy to secure a Rs 100 crore term loan from the erstwhile Syndicate Bank, now merged with Canara Bank, at its Large Corporate Branch in Mumbai, together with a USD 50 million foreign currency loan from its London branch. The agency alleges the credit facilities were not used for their sanctioned purposes and that the funds were diverted and siphoned off through associate entities, causing an estimated wrongful loss of Rs 212.3 crore.

The FIR covers charges of criminal conspiracy, cheating and provisions of the Prevention of Corruption Act. During the searches, officials seized bank account and property details of the directors, deposit slips, mutual fund portfolio documents and company ledgers. The CBI said further investigation is ongoing to trace the ultimate end-use of the diverted loan proceeds and to establish the roles of all involved, including public servants. The agency has previously arrested a Senior Divisional Mechanical Engineer from the South East Central Railway in Bhilai over bribery allegations tied to clearing pending bills, according to Ani News.

Canara Bank's Capital and Leadership Position

Canara Bank is a Government of India public sector commercial bank founded in 1906, offering retail, NRI, MSME, agricultural, corporate and government banking services through a pan-India branch network, more than 11,000 ATMs and digital channels, according to akta.pro company records. The same records show the bank appointed Brajesh Kumar Singh as Managing Director and CEO effective May 30, 2026, for a tenure until April 2029, and that its board approved raising up to Rs 8,500 crore through Basel III compliant bonds for FY26-27, comprising Rs 4,500 crore of Additional Tier I and Rs 4,000 crore of Tier II instruments.

Canara Bank's Recent Disclosures

On October 21, Canara Bank's MD Brajesh Kumar Singh said the sale of Canbank Factors to Vidvedaa Private Ltd is expected to be completed by the end of the current financial year, generating Rs 80.5 crore, EIN Presswire reported. A day earlier, TradingView reported Singh warning that rising government bond yields pose mark-to-market provisioning risk while festive-season demand for housing and vehicle loans is expected to be strong. On October 17, the New Indian Express reported Singh saying a proposed insurance commission cap could cost the bank Rs 150-200 crore, with losses expected to be offset by higher insurance product sales.

Next Steps for Canara Bank

The CBI said its investigation continues into the end-use of the loan proceeds and the roles of those involved. Canara Bank has set the completion of the Canbank Factors sale to Vidvedaa Private Ltd for the end of the current financial year.