For the first time since the twin IDFC First Bank frauds rocked Chandigarh, a senior bureaucrat has been arrested.
The Central Bureau of Investigation (CBI) on Wednesday evening took into custody Navneet Kumar Srivastava, a senior Indian Forest Service (IFS) officer who headed the Chandigarh Renewable Energy and Science & Technology Promotion Society (CREST) when nearly Rs 75 crore of its funds allegedly vanished into shell companies–with investigators now disclosing that part of that money was routed to a private firm where Srivastava’s own wife and a close relative are directors.
Below is all about the arrest, case and where it goes from here.
Who is Navneet Kumar Srivastava?
Srivastava is a senior IFS officer who served as Chief Executive Officer of CREST, the Chandigarh Administration body responsible for promoting renewable energy and science and technology initiatives in the Union Territory. As CEO, he was the top decision-making authority over CREST’s institutional funds, which were parked in accounts at IDFC First Bank’s Sector 32 branch — the very branch already at the centre of the Rs 117-crore CSCL-MCC fraud.
Srivastava had already been removed from the CREST CEO post and formally suspended by the Centre on the recommendation of Punjab Governor and Chandigarh Administrator Gulab Chand Kataria, months before this arrest.
Why has he been arrested?
The CBI told the court that funds parked in three CREST bank accounts were fraudulently siphoned into various shell companies and then converted for the personal use of beneficiaries — causing an estimated loss of nearly Rs 75 crore to CREST during the period Srivastava headed the organisation.
The most damaging disclosure: investigators say part of the proceeds of crime was diverted to a private company in which Srivastava’s wife and a close relative are directors. A senior CBI official told The Tribune that Srivastava’s role surfaced only after detailed scrutiny of financial transactions, bank records and money trails connected to the diversion.
Srivastava was produced before the Special CBI Court, Chandigarh, on Wednesday evening and remanded to three days of CBI custody for further interrogation.
What is the CREST scam, and how big is it?
The CREST fraud surfaced after a reconciliation of its bank accounts at IDFC First Bank revealed around 300 unauthorised transactions. Investigators found a principal shortfall of Rs 75.16 crore and an additional interest loss of Rs 7.88 crore — a total fraud of Rs 83.04 crore. Forged bank statements, allegedly sent from the official email IDs of bank officials, concealed the fraud for months before it was detected.
This is one half of the twin IDFC First Bank scandal that together exceeds Rs 200 crore — the biggest financial fraud in Chandigarh’s history. The other half is the Rs 117-crore CSCL-MCC fraud, executed at the same Sector 32 branch using an almost identical playbook: hidden bank accounts, forged statements, and funds funnelled through shell companies. Investigators have repeatedly pointed to common shell firms, overlapping accused and a near-identical modus operandi linking both Chandigarh cases to the related Rs 550-crore Haryana government funds scam at the same bank.
Why is the arrest significant?
Until now, every arrest in the CREST case had been confined to operational-level functionaries — former Project Director Sukhwinder Singh Abrol and accountant Sahil Kukkar, both already chargesheeted and in judicial custody, along with bank officials and shell company operators. The CBI had recently filed its first chargesheet in the CREST case against 13 accused, including five IDFC First Bank officials, two CREST public servants, two shell entities with three of their partners or directors, and one private individual — all currently in judicial custody.
Srivastava’s arrest changes that picture entirely. As the CEO who headed CREST, he sat above the accountants and project directors who managed day-to-day transactions. His arrest signals that the CBI is no longer stopping at the operational level — it is moving up the administrative chain to examine who at the top was responsible for monitoring, and possibly enabling, the alleged diversion of public funds.
The timing is also notable: the arrest comes just a day after a Chandigarh court granted default bail to businessman Vikram Wadhwa in the CSCL-MCC case on technical grounds related to delayed filing of the chargesheet. Wadhwa, however, remains in jail because he is also an accused in the CREST case and the Haryana government funds scam — underlining that even as one accused gets a technical reprieve in one case, the CBI’s broader crackdown continues to widen elsewhere.
What does this mean for Chandigarh residents?
CREST was set up to advance renewable energy and science and technology projects for the benefit of the Union Territory — funded entirely by public money. The nearly Rs 75 crore allegedly siphoned from its accounts, and now allegedly traced in part to the CEO’s own family-linked company, represents a direct breach of the trust residents placed in a government institution meant to serve them.
The involvement of five bank officials in the first chargesheet alone points to what investigators describe as a systemic compromise of internal banking controls — a private bank’s own staff allegedly working in tandem with public servants to treat government money as available for private benefit. For residents, the case is a stark illustration of how weak institutional oversight at multiple levels — bank, society, and administration — allowed alleged fraud to continue undetected for months.
What can this lead to?
With Srivastava now in CBI custody, investigators are expected to focus on the internal decision-making process at CREST, including approvals relating to fund transfers and banking operations, and whether lapses in monitoring mechanisms allowed the alleged diversion to continue unchecked. The agency is also expected to dig deeper into the private company linked to Srivastava’s wife and relative, to establish the exact flow of diverted funds and identify all ultimate beneficiaries.
The CBI has said it remains committed to a thorough, impartial and expeditious investigation to ensure accountability at every level — language that suggests further arrests, particularly among other senior officials who oversaw CREST and CSCL during the relevant period, cannot be ruled out. Former CSCL Chief General Manager and MC retired Chief Engineer NP Sharma, already grilled for days by investigators in the parallel CSCL case, remains one such senior figure still under the scanner without arrest.
What next
Residents and observers should track three things in the coming days: the outcome of Srivastava’s three-day custodial interrogation and whether it leads to further arrests; whether the CBI’s scrutiny of his wife’s company widens into a separate money-trail probe; and whether this arrest sets a precedent for the agency to pursue other senior administrative officials linked to the CSCL and Haryana funds cases. A special CAG audit and full account reconciliation across all three linked scams — CSCL-MCC, CREST and the Haryana funds case — remain ongoing, and their findings will likely shape how far up the chain the CBI’s net eventually extends.
