The RBI started the probe following complaints that TFCI's loans were not backed by proper security.

The Company Law Board has also appointed a commissioner to authenticate the company's records, including shareholders' register, minutes of the company's board meetings and cash book and bank pass books following a petition by a non-banking finance company against Sunair Hotels. VLS Finance, the NBFC, holds 70 lakh equity shares in the company. It had also extended an inter-corporate deposit of Rs 8 crore to Sunair.

Sunair Hotels' project was appraised by TFCI. The debt component for the hotel project as per the appraisal was Rs 42 crore of which TFCI agreed to contribute 50 per cent but laid down strict disbursement conditions.

TFCI agreed to extend loans by accepting a pledge of promoters' equity as security, butlaid down strict conditions for disbursal of loans. TFCI also made disbursal conditional on the tying up of balance part of the funds required for the project. The exact level of promoters' contribution by way of equity was also prescribed.

TFCI did not disburse the loans for over 18 months. However, early this year it amended certain conditions and disbursed Rs 10.50 crore. But the entire transaction has now run into rough weather as CLB has suspended voting rights of promoters on the equity shares pledged by them with TFCI. The entire equity faces the risk of being cancelled.

The Oriental Bank of Commerce, which had sanctioned and disbursed a loan of Rs 5 crore, has also held back short-term deposits of Rs 2 crore made by the company with the bank and marked them under the loan account.

The petition filed before the CLB alleges the company repeatedly rotated Rs 1 crore through two other companies associated with the promoters -- Sunaero Ltd and HJ Consultants -- to create a capital of Rs 21 crore inSunair Hotels. It is alleged that the promoters, thus, created a capital base of Rs 21 crore without actually bringing in the money. All the three companies allegedly used for rotation of money to create the capital of Rs 21 crore had three common directors -- SP Gupta, Kaveen Gupta and Vipul Gupta.

Sources said the RBI is expected to complete its investigation into the TFCI-Sunair transaction by January-end.