In a major crackdown in the investigation into the alleged money laundering at the debt-ridden Infrastructure Leasing and Financial Services Ltd (ILFS), the Enforcement Directorate (ED), on Wednesday has reportedly arrested the company's former directors Arun K Saha and K Ramachand. Both the directors had previously resigned when the Serious Fraud Investigations Office (SFIO) had started probing into the ILFS scam.
As per the report filed by ED, accessed by Republic sources, the case was registered in February 2019 and subsequent searches were conducted at various locations where various incriminating documents were recovered.
The report also reveals that Saha and Ramchand along were involved in various illegal activities detrimental to the ILFS group. They were involved in sanctioning and disbursement of loans without proper security, to financially distressed groups. Further, the report states that they flagrantly violated RBI norms by indirectly transferring IL&FS Financial Services (IFIN) to IL&FS Transportation Networks (ITNL) through third-party contractors.
Citing as both directors were uncooperative and at a top level with a potential to influence witnesses and destroy evidence, Saha and Ramchand were arrested, as per the report filed by the agency.
Here is the report:
Earlier on May 31, the SFIO filed its first charge sheet where 30 entities including officials of IFIN and its auditors were booked for committing fraud and criminal conspiracy to cause loss to public investors. Prior to Wednesday's arrests, SFIO had earlier arrested IFIN officers R C Bawa and Hari Sankaran, who are currently in judicial custody.
As per news reports, ILFS which has over Rs 91,000 crore in debt is facing severe liquidity crisis and has been defaulting payments of interests since September 2018. While its debt made market indices fall, the National Company Law Tribunal (NCLT) appointed a six-member panel to take over the management at ILFS in which stakes are owned majorly by LIC, SBI, Orix Corporation of Japan, Abu Dhabi Investment Authority, HDFC and Central Bank of India.
To avoid further mismanagement of the company and in order to protect the public interest, the government ordered an investigation by Serious Fraud Investigation Office (SFIO) into the affairs of the ILFS, in October 2018, as per reports.