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According to a report by Grant Thornton, after the Reserve Bank of India (RBI) advised IL&FS Financial Services (IFIN) against lending to the group firms, IFIN started buying shares from those companies, to provide them funds, circumventing the central bank's advisory.In the inspection report for the financial year 2016, which was issued on November 2017, the RBI had advised IFIN to reduce its exposure to the group companies with no fresh lending to them as it impacted IFIN's overall ability to lend.Grant Thornton, in its forensic audit report says that after November 1, 2017, IFIN purchased shares from IL&FS Transportation Networks Ltd (ITNL), IL&FS Energy Development Company and IL&FS Airports Ltd, "which were potentially held as long term investment and funds were provided to them as a consideration".Quoting the RBI's inspection report issued in March 2019, Grant Thornton said that there was significant diminution amounting to Rs 145 crore in the value of investments purchased from ITNL."Also, based on our assumptions and calculation, it is noted that there is a diminution in shares amounting to Rs 190 crore in the value of investment purchased from IL&FS Energy Development Company as on March 31, 2018. Further, it was noted that the shares purchased from IL&FS Airports Ltd was not transferred in the name of IFIN till September 2019 and the amount provided by IFIN is recorded in the books as advance for purchase of shares," the report said.The data showed that IFIN bought shares in ONGC Tripura Power Company from IL&FS Energy Development Company at Rs 360 crore. It purchased shares in Gujarat Road and Infrastructure Company Ltd and Pipavav Railway Corporation Ltd from ITNL at Rs 207 crore and Rs 54 crore respectively.IFIN also acquired shares in Bengal Aerotropolis Projects from IL&FS Airports Ltd with an investment of Rs 112 crore.As per the report, all the mentioned transactions were approved by the investment committee, including Hari Sankaran, Arun Saha, Vibhav Kapoor, Ramesh Bawa and Ramchand Karunakaran, who were then part of IFIN."It appears unusual that post November 1, 2017 after RBI restriction on loans, the shares were purchased from IL&FS group companies whose value diminished within four months of purchase. Thus, it appears that it was a transaction in lieu of extending funds to group companies," it said.( With inputs from IANS )

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