You as a practising Company Secretary has been approached by Popular Bank to carry out due diligence regarding the loan of ₹50 crore to be given to Weak Ltd. How would you find that the company has misused borrowed funds

Siphoning of funds, should be construed to occur if any funds borrowed from banks/Financial Institutions are utilised for purposes un-related to the operations of the borrower, to the detriment of the financial health of the entity or of the lender. The decision as to whether a particular instance amounts to siphoning of funds would have to be a judgment of the lenders based on objective facts and circumstances of the case. The identification of the wilful default should be made keeping in view the track record of the borrowers and should not be decided on the basis of isolated transactions/incidents. The default to be categorised as willful must be intentional, deliberate and calculated.