IFCI Factors faces CAG rap over loan restructuring

IFCI Factors Ltd, an arm of IFCI, failed to insist on tangible security while restructuring short-term loan to Glodyne Ventures and Holding Private leading to non-recovery of dues of Rs 24.23 crore, CAG has said.
"IFCI Factors decided to restructure short-term loan sanctioned in December 2010 to Glodyne Ventures and Holding Private without insisting on tangible security, which led to non-recovery of dues of Rs 24.23 crore (Rs 15 crore principal and Rs 9.23 crore interest)," the Comptroller and Auditor General (CAG) said in a report that was tabled today in Parliament.
IFCI Factors offers corporate and short-term loans to customers towards general purposes and augmenting their working capital.

These loans are backed by suitable security in the form of pledge of listed shares/equitable mortgage of tangible properties.
Elaborating, the CAG report said that in order to meet expenses for various business initiatives of Glodyne Ventures and Holding Pvt Ltd (GVHPL) (a Glodyne Group Company), the IFCI Factors sanctioned and disbursed corporate loan of Rs 15 crore in 2010.
The tenure of the loan was two years, including a moratorium of 17 months. Accordingly, it was repayable in three equal quarterly instalments of Rs 5 crore each in June, September and December 2012, it explained.

GVHPL defaulted on payment of interest with effect from May

2012 and first instalment of loan due in June 2012.
The auditor said IFCI Factors restructured loan in August 2012 with lenient terms, which was "injudicious" as GVPHL did not furnish additional security to cover loan of Rs 15 crore.