SFIO probes 15 years of systemic lending lapses at IFCI: 3 CMDs, over 90 entities under scanner in ₹6,855 crore loan fraud investigation
&imwidth=600&imheight=450&format=webp&quality=medium "SFIO probes 15 years of systemic lending lapses at IFCI: 3 CMDs, over 90 entities under scanner in ₹6,855 crore loan fraud investigation")
Representative image: Fraud Photograph: (Canva)
The case has been filed as Company Petition CP/34/PB/2026 on January 24 and has already reached the admission stage. More than 90 individuals and entities have been named as respondents, underlining the scale of the probe.
A Rs 6,855 crore loan trail is now under the Serious Fraud Investigation Office (SFIO) scanner, with the investigation stretching across multiple leadership eras. The SFIO, India's corporate fraud watchdog, has stepped up its action against IFCI, moving the National Company Law Tribunal with a broad petition that covers institutions, senior executives and several corporate borrowers. At the heart of the case are alleged irregularities in loans worth Rs 6,855 crore.
Reports suggest that this is not just about a possible fraud. It also raises bigger questions around accountability at the highest level in the country. In a rare move, three former CMDs of an institution, from different tenures, are now under scrutiny. That alone suggests the issue may reflect deeper, long-term governance gaps. Several large corporate names are also part of the probe, pointing to wider linkages across the system.
Experts say this could turn into a landmark case on how legacy financial misconduct is handled in India. They also believe the outcome could reshape accountability standards across financial institutions, if the allegations are proven. The next NCLT hearing will be key in deciding how far and how deep the probe goes.
Three CMDs under one probe
SFIO has named three former IFCI Chairmen and Managing Directors:
- Santosh Nayar
- Malay Mukherjee
- Atul Kumar Rai
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Having three CMDs in a single investigation is highly unusual. It suggests the problem may have spanned multiple leadership cycles, not just a one-off lapse. The key question now is whether this was an isolated failure or a pattern built into the system.
Inside the NCLT case
The case has been filed as Company Petition CP/34/PB/2026 on January 24 and has already reached the admission stage. More than 90 individuals and entities have been named as respondents, underlining the scale of the probe.
What triggered the action
According to SFIO’s petition, there were serious lapses in core lending processes:
- Due diligence norms were not properly followed
- Valuation and risk assessment practices were questionable
- Internal approval systems may have been bypassed
The result was a pile-up of bad loans with a significant financial impact.
Corporate names under scrutiny
Several well-known companies are part of the investigation, many of which have already faced financial stress:
- Blue Coast Hotels
- Amtek Auto
- Alok Industries
- Bhushan Steel
- Jaypee Infratech
- ABG Shipyard
- Pipavav Defence
Many of these firms have gone through insolvency proceedings, raising concerns about how creditworthiness was assessed when the loans were cleared.
A widening net
The probe is not limited to corporate borrowers. It also includes current and former IFCI officials, including senior management and board-level executives. In total, over 90 respondents have been named.
Investigators are now looking into whether lending decisions involved collusion or a deliberate dilution of norms at higher levels.