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Oct 11, 2017 12:46 PM IST | Source: Moneycontrol.com

SBI-led consortium orders forensic audit of Punj Lloyd's accounts

Punj Lloyd has sought a restructuring of its Rs 14,000 crore debt. A clean chit will give the group some respite as it struggles to revive the business.

SBI-led consortium orders forensic audit of Punj Lloyd's accounts

Moneycontrol News

A State Bank of India-led consortium of lenders has ordered a forensic audit of construction company Punj Lloyd after it failed to service its loan for eight consecutive quarters, the Economic Times reported.

A forensic audit typically involves probing applications of loans taken by the borrower, checking financial and bank statements to check source of funds taken for business activities, transactions done with various other parties like suppliers, and also identifying the borrower's assets.

Punj Lloyd has sought a restructuring of its Rs 14,000 crore debt. A clean chit will give the group some respite as it struggles to revive the business.

Audit firm Chokshi & Chokshi have been appointed to conduct the audit by the 20-lender consortium and will examine the company's accounts from 2014-15 onward. SBI refused to comment on individual accounts to ET.

The audit is in line with the Reserve Bank of India's debt restructuring guidelines. According to the S4A scheme, banks are allowed to restructure a stressed account by converting part of their loan to equity and resetting payment terms for the remaining amount.

The group had sought restructuring of nearly USD 163 billion, but failed to secure a deal. The account is currently classified as SMA-II, which means that the loan repayments have been delayed by 60-90 days. If the delay in repayment crosses 90 days, the account will be classified as non-performing.

Earlier this year, the lenders of Punj Lloyd had appointed Feedback Infra to ascertain whether its debt was sustainable after loans are restructured.
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