The erstwhile promoters of Srei have questioned the findings of transactions auditor BDO India which reported fraudulent transactions worth Rs 2,133.74 crore under the previous management between FY18 and FY21.

According to sources close to the Kanorias, in communication to Srei administrator Rajneesh Sharma and the stock exchanges, Hemant Kanoria, founder of Srei Infrastructure Finance and (SIFL) and Srei Equipment Finance (SEFL) has said that a team of competent professionals were in charge of managing the affairs of the Srei group companies and all processes and operating procedures were stringently followed.

Adequate recovery steps have also been taken in the past from defaulting borrowers. Credit facility to any borrower was extended by the companies after the facility was approved by various committees and sub-committees comprising seasoned professionals, who had taken due consideration of the risk and repayment factor in mind while extending the facilities.

The communication also states that many of the entities which were extended loans after following the same procedure have been repaying their loan liabilities along with interest. The erstwhile promoters said the repayments meant that the allegation of fraud was not tenable.

The communication also said that the transaction auditor reports demonstrate incomprehension of structured transactions on financing which the company has been doing for the last three decades. On October 4, 2021, the Reserve Bank of India announced that it had superseded the board of the two Srei group companies (SEFL and SIFL) and appointed Rajneesh Sharma, ex-CGM, Bank of Baroda as the administrator. RBI then initiated insolvency proceeding against the Srei group companies. Sharma had appointed BDO India LLP as a transaction auditor to conduct investigations into the company’s affairs.