New Delhi, Feb 9 (PTI) The Comptroller and Auditor General of India (CAG) on Tuesday pulled up India Infrastructure Finance Company Ltd (IIFCL) for not following prudent guidelines for lending, leading to a loss of Rs 26.20 crore in one case.

IIFCL sanctioned and disbursed two loans under Takeout Finance Scheme without ensuring compliance of critical requirement of obtaining 'No Objection Certificate' from concessionaire authorities, and without ensuring required debt servicing capacity of the borrowers from their audited annual accounts, CAG said in a report. 

"Further, in one case, the project had already been terminated before execution of the takeout financing documents between IIFCL and the original lender banks, while in the other case, the notice of termination of project happened before disbursement of loan by IIFCL. Resultantly, the loans of Rs 26.20 crore became irrecoverable," it said. 

Raipur Waste Management Private Limited (RSWPL) and Bhilai Durg Waste Management Private Limited (BDWPL) were two concessionaire Special Purpose Vehicles (SPVs) for operation of solid waste management projects of Raipur Municipal Corporation (RMC) and Bhilai and Durg Municipal Corporation (BMC), respectively.

Due to non-adherence of the provisions of its own credit policy, it said, IIFCL extended loan in the projects which had already been terminated and consequently suffered a loss of Rs 26.20 crore (Rs 13.59 crore plus Rs 12.61 crore written off). 

It is recommended that responsibility may be fixed for the lapses pointed out by audit, the report added. 

With regard to SBI Global Factors Ltd, the report said the company sanctioned domestic factoring facility worth Rs 35 crore to Fabtech Projects & Engineers Ltd (FPEL).  

The facility showed early warning signals of stress such as delays in payments, direct payments, downgrading of credit rating, adverse remarks in auditor's report etc, it said.

However, the company continued to factor the invoices submitted by FPEL and made payments to them instead of taking affirmative action to reduce and exit from the facility.  

The asset became NPA in March 2019 and dues amounting to Rs 28.37 crore remained unrecovered, the CAG report added.

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