ED Slams Grant Thornton Audit for Missing ₹30,000 Cr IL&FS Scam Trail

New Delhi – The Enforcement Directorate (ED) has expressed dissatisfaction with the interim forensic audit submitted by Grant Thornton on the financial affairs of IL&FS Financial Services Ltd (IFIN). While the firm identified irregular transactions worth ₹2,364 crore, the ED believes the actual scale of wrongdoing could be much larger—possibly exceeding ₹30,000 crore.

IL&FS currently has an overall debt of ₹89,000 crore, of which ₹65,000 crore falls under the ‘amber’ and ‘red’ categories, indicating low chances of recovery. The audit report, submitted to the IL&FS board on February 20 and reviewed by the ED a week later, reportedly fails to provide an in-depth analysis of complex loan layering and lacks essential details of fund diversion.

Sources familiar with the probe stated that the Grant Thornton report merely touches the surface of the scam. “The report doesn’t investigate secondary or tertiary layers of loan disbursement,” said an official. “The primary layers looked clean on paper, but the funds were allegedly funneled through a web of shell entities with little to no real operations.”

The ED is particularly interested in identifying companies that received funds indirectly—especially in cases where no proper collateral was presented or where directors and promoters personally benefited. “The critical link—whether the final recipients of the funds were legitimate businesses or paper companies—is missing from this report,” a senior official added.

Questions have also been raised about Grant Thornton’s own credibility, given that the firm was earlier investigated by the Serious Fraud Investigation Office (SFIO) in the Kingfisher Airlines case for allegedly inflating the brand equity of Kingfisher, which was used to secure loans.

The ED now suspects the IL&FS case could be one of the largest financial frauds in Indian history, with over ₹30,000 crore unlikely to be recovered and ₹50,000 crore categorized as completely non-serviceable debt.

As previously reported by Moneycontrol, the forensic report shows that loans given by IFIN to external borrowers were routed to IL&FS group entities, especially ITNL (IL&FS Transportation Networks Ltd). The audit identified around ₹2,270 crore in such transfers.

Major recipients include:

• ITNL – ₹1,150 crore

• Srinagar Sonmarg Tunnelway Ltd – ₹390 crore

• Gujarat Integrated Maritime Complex – ₹250 crore

• Fagne-Songard Expressway – ₹200 crore

• Chennai-Nashri Tunnel Way – ₹150 crore

• Sea Land Port – ₹100 crore

• Sitar Bikaner – ₹30 crore

Other intermediaries such as SREI, Empower, Vistar, GHV, PCL, Sangam, and Dynamatic reportedly acted as channels to redirect these loans.

In at least six instances under ED scrutiny, over ₹100 crore was traced to personal accounts of promoters and directors. For example, IFIN disbursed ₹75 crore to Prism International Pvt Ltd in October 2017, of which ₹7.5 crore was forwarded to director Prem Kishan Gupta.

Similarly, Flemingo Group received ₹514.5 crore, and its directors Kabir and Viren Ahuja received ₹8.81 crore. Siddharth Dinesh Mehta, a promoter of Bay Capital and a director in IL&FS Energy Development Company Ltd, also received ₹2.95 crore through layered transactions.

The ED has now intensified its investigation, seeking a more exhaustive forensic review and potentially widening the probe to cover senior IL&FS leadership, shell firms, and external facilitators.