IL&FS case: Trial against 30 entities to begin soon

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Mumbai | Published: June 4, 2019 3:04:06 AM

The investigative agency has also written to the Reserve Bank of India (RBI), pointing out how the central bank could have prevented the fraud, the official said.

ILFS case, company Trial, business fraud,

A trial against the 30 entities charges by the Serious Fraud Investigation Office (SFIO) in the IL&FS defraud case will begin soon, a senior official with knowledge of the matter said. Last week, the SFIO filed a chargesheet before a special court in Mumbai against 30 parties, including former directors of IL&FS Financial Services (IFIN), for committing financial fraud.

The investigative agency has also written to the Reserve Bank of India (RBI), pointing out how the central bank could have prevented the fraud, the official said. “The SFIO can make recommendations in such cases, and it has made a few recommendations to the RBI about looking into how the affairs were being conducted which allowed matters to escalate to such extent at IFIN.

It is now the onus of the RBI to act upon those recommendations,” the official told FE.

In April, the SFIO had arrested Ramesh Bawa, former managing director and CEO, and Hari Sankaran, vice-president of IFIN, for their role in the IL&FS financial scam. Both Individuals have been named in the chargesheet filed last week.

Audit firms Deloitte Haskin and Sells and BSR Associates have also been named in the chargesheet, the official added. According to several news reports, the SFIO found these firms colluded with senior management of IFIN to misrepresent the company’s financial status. The financial crime probe agency continues to investigate the affairs which led to a default by the parent company, the official said.

The financial irregularities in the books of IL&FS came into scrutiny last year after the company failed to fulfil short-term and long-term debt obligations to the tune of `91,000 crore. In October 2018, the Mumbai bench of the tribunal ordered the suspension of the IL&FS board, to be replaced by a government-appointed board. Uday Kotak, manging director, Kotak Mahindra Bank, was appointed non-executive chairman of the new board, which currently oversees the resolution process of the company.

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