CBI books Educomp Solutions, its directors for defrauding banks of Rs 1,955 crore
New Delhi: The CBI has booked Educomp Solutions, its subsidiary and directors for allegedly defrauding an SBI-led consortium of 13 banks to the tune of Rs 1,955 crore and carried out searches at eight locations on Tuesday, officials said.
The agency booked Educomp Solutions Ltd, its managing director Shantanu Prakash, guarantor Jagdish Prakash, its subsidiary Edu Smart Services Pvt Ltd and directors Vijay Kumar Choudhary and Vinod Kumar Dandona for criminal conspiracy, cheating, forgery and under provisions of the Prevention of Corruption Act, they said.
After filing the FIR, the agency carried out searches at eight locations in Delhi, Dehradun and Gurugram on the premises of Educomp Solutions, Edu Smart and its directors, the officials said.
The CBI action came on a complaint from seven of the 13 banks, including the State Bank of India, which have declared the account as fraud.
The banks have alleged that Educomp Solutions (ESL), incorporated in 1994, was in the business of creating digital educational content for schools and vocational courses under the brand names "Smartclass" and "Edureach" respectively, they said.
It used to enter tripartite agreements with its own subsidiary, Edu Smart Services Pvt Limited (ESPL), and schools for providing the content.
ESL used to sell hardware and digital content under its "Smartclass" business to ESPL, which used to sell it to schools with realisation of sales spread over a contract period of five years on quarterly basis, the officials said.
It is alleged that ESPL had sought term loans from consortium members by keeping contracted future cash flows from schools as security, which was sanctioned.
The loans raised by ESPL were required to be passed on to its creditors that is ESL, the CBI has alleged.