CBI opens UCO Bank fraud case against SREI and its directors

What the Record Shows

The Central Bureau of Investigation has registered a case, on a complaint by UCO Bank and following directions of the Calcutta High Court, against SREI Equipment Finance Ltd, SREI Infrastructure Finance Ltd and their directors Hemant Kanoria and Sunil Kanoria, along with unidentified bank officials and others. The agency conducted searches at premises in Kolkata on 29 January 2026. Per the CBI, the case alleges a wrongful loss of about Rs 991.02 crore, comprising Rs 730.82 crore on SREI Equipment Finance accounts and Rs 260.20 crore on SREI Infrastructure Finance accounts.

The investigation is the latest step in a matter that began years earlier. The Reserve Bank of India superseded the boards of both companies under Section 45-IE of the Reserve Bank of India Act, 1934 in October 2021, citing governance concerns and payment defaults, and appointed Rajneesh Sharma, a former senior executive of Bank of Baroda, as administrator before referring both firms to insolvency.

No charge has been framed and no chargesheet has been filed in the CBI matter, which remains at the stage of an FIR and searches. The allegations are those of the agency and have not been tested at trial. Hemant Kanoria has publicly said the companies were "forcibly dragged" into bankruptcy, and the erstwhile promoters have contested the characterisation of the transactions.

How It Worked

Per the CBI's case, between 2014 and 2020 the borrower companies allegedly violated the terms of their sanctions and diverted and misappropriated bank funds. The agency alleges that money was advanced to connected entities on unfavourable terms, that funds were round-tripped between group companies, and that loans were written off in a manner the complaint questions. Each of these is an allegation the CBI must still establish.

Separately, during the insolvency, the administrator's transaction auditor examined the companies' books. In November 2022 that auditor reported transactions worth about Rs 13,110 crore to the RBI as fraudulent under the RBI's fraud-reporting framework, flagging large volumes of related-party and what it called "potential related-party" exposures. That figure is a transaction auditor's report to the regulator, not a judicial or regulatory finding of fraud, and the former promoters have disputed it.

The procedural backbone is a matter of record. After the RBI superseded the boards under Section 45-IE, both companies entered the corporate insolvency resolution process. The National Asset Reconstruction Company Ltd emerged as the successful resolution applicant; the committee of creditors approved its plan on 15 February 2023 and the National Company Law Tribunal approved it on 11 August 2023. The National Company Law Appellate Tribunal upheld the admission and resolution on 5 January 2024, and the Supreme Court affirmed the position on 7 March 2024.

Who Lost Money

The exposure runs across public sector lending and public savings. UCO Bank's complaint anchors the CBI's Rs 991.02 crore figure, but the SREI group's borrowings were spread across a wider consortium of lenders whose claims were dealt with in the insolvency. The recoveries available to those creditors were determined by the value of the NARCL resolution plan, which, as in most large financial-services insolvencies, realised a fraction of the admitted claims.

Beyond the banks, SREI Infrastructure Finance had raised money from the public through debentures and fixed deposits. Retail debenture holders and deposit holders, along with the company's shareholders, ranked in the insolvency waterfall and bore the consequences of the collapse. How much any individual holder ultimately recovered depended on their class of claim and the distribution under the approved plan.

It is worth separating the numbers. The Rs 991.02 crore is the loss the CBI's UCO Bank complaint alleges; the Rs 13,110 crore is the volume of transactions the administrator's auditor flagged to the RBI; neither is a court-established loss figure. Both should be read as what they are - an allegation and an auditor's report - rather than as a settled account of money proven to be lost.

Where It Stands Now

The corporate story is largely resolved; the criminal investigation is not. SREI's insolvency concluded with the NARCL plan, affirmed all the way to the Supreme Court in March 2024, so the companies themselves have passed to a new owner. The CBI case registered on the UCO Bank complaint, by contrast, is at an early stage: an FIR and searches, with no charge framed against the Kanorias or anyone else as of this report.

An FIR contains allegations, not findings of guilt; the persons named are presumed innocent until proven guilty, and due process continues. The transaction auditor's report to the RBI is an input to that process, not a verdict, and the promoters' denial is on the record. Any further step - a chargesheet, the framing of charges, or a decision by the agency to close the matter - would change the footing of the case.

This report reflects the position on the official record as reviewed today. Because the criminal case rests so far only on a complaint and an investigation, nothing in it should be read as establishing that any offence has been committed.

What It Means

The SREI matter shows how a single corporate failure generates several parallel tracks that move at very different speeds. A regulatory supersession under Section 45-IE is swift and administrative; an insolvency resolution runs on the timetable of the tribunals and can take years; a criminal investigation on a lender's complaint can begin long after the company has already changed hands, as happened here with searches in 2026 over conduct alleged from 2014 to 2020.

For a reader, the practical takeaway is to keep these tracks distinct. The RBI superseding a board is a governance action. An auditor reporting transactions as fraudulent is a report to the regulator. A CBI FIR is the opening of an investigation. None of them is a conviction, and treating an early-stage allegation as a proven fact is exactly the error the presumption of innocence exists to prevent.

The wider record of such matters sits in Oquilia's enforcement archive. Related recent reports include the CBI investigation into Reliance Communications and its former promoter and the Kerala High Court's transfer of Kuwait bank loan-default cases to the Crime Branch, each a different stage of the same enforcement chain.

FAQ

Does this mean the people named are guilty?

No. The CBI case is at the stage of an FIR and searches. It contains allegations, not findings of guilt. Hemant Kanoria, Sunil Kanoria and the companies named are presumed innocent until proven guilty. No charge has been framed and no trial has begun; the investigation is continuing.

What did the RBI actually do?

The RBI superseded the boards of SREI Infrastructure Finance and SREI Equipment Finance under Section 45-IE of the RBI Act in October 2021, citing governance concerns and payment defaults, and appointed an administrator. Supersession is a supervisory action; it referred the companies to insolvency and is distinct from any criminal liability.

What is the Rs 13,110 crore figure?

It is the value of transactions that the administrator's transaction auditor reported to the RBI as fraudulent in November 2022, under the RBI's fraud-reporting framework. It is an auditor's report to the regulator, not a judicial or regulatory finding, and the former promoters have disputed it.

What happened to SREI as a company?

Both companies were resolved through the insolvency process. The National Asset Reconstruction Company Ltd's resolution plan was approved by the tribunal on 11 August 2023, upheld by the appellate tribunal on 5 January 2024, and affirmed by the Supreme Court on 7 March 2024.

Where can I read the official record?

The appellate tribunal's order recording the RBI supersession and the resolution outcome, and a related Calcutta High Court order, are available on Indian Kanoon and are linked at the end of this report.

This report is based on the NCLAT order in Adisri Commercial Private Limited vs Reserve Bank of India dated 4 April 2024 and a related Calcutta High Court order in Hemant Kanoria vs Bank of India dated 2 February 2024, reviewed on 2 August 2026.