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ED grills former top officials of IL&FS in money laundering case

According to report, the ED is in process to call other officials of IL&FS next week for questioning in connection with manipulation of thousands of crore of money. Adding to it, overseas companies of the IL&FS group are also under the ED's scanner.

twitter-logo BusinessToday.In   New Delhi     Last Updated: February 23, 2019  | 16:16 IST
ED grills former top officials of IL&FS in money laundering case
The Enforcement Directorate on Friday questions top officials of IL&FS in money laundering case

After conducting raids at multiple locations in Mumbai, Delhi and Gurugram in the matter concerning alleged financial irregularities in Infrastructure Leasing and Financial Services (IL&FS), the Enforcement Directorate (ED) on Friday questioned former group chief financial officer Maharudra Wagle.

According to an India Today report, the ED is in process to call other officials of IL&FS next week for questioning in connection with manipulation of thousands of crore of money. Adding to it, overseas companies of the IL&FS group are also under the ED's scanner.

The ED on Wednesday registered a case against the IL&FS's top officials including its former chairman Ravi Parthasarathy, under the Prevention of Money Laundering Act (PMLA) and carried out raids across multiple locations in Delhi-NCR and Mumbai concerning financial irregularities in the IL&FS. The probe agency reportedly searched the premises of the infrastructure lender's former officials and seized various property documents and incriminating records/media.

The FIR was registered for alleged cheating and forgery on part of IL&FS group and its managing committee from during the period 2010 to 2018, according to reports.

The ED registered this case following a report submission by the Serious Fraud Investigation Office (SFIO) in the IL&FS case. The report has instances of shady transactions, misreporting of income, conflict of interest, ever-greening of loans and personal enrichment of key employees.

Also Read: ED files case against IL&FS top officials, raids Mumbai, Delhi-NCR offices

The infrastructure lender's crisis came to light last year following a series of defaults by its group companies on their debt obligations which accumulated to the tune of about Rs 91,000 crore.

"It was alleged in the FIR that the group has taken investments on the basis of false projections and has been involved in forging the books of accounts, in providing loans to subsidiaries, related companies and thereby, layering and routing the funds," the ED said.

Mumbai-based IL&FS, which is sitting on a debt pile of about Rs 91,000 crore, has defaulted in bank loans (including interest), long term and short term deposits and failed to service its Commercial Papers (CP) redemption obligations since March 2018.

LIC is the largest shareholder in the group with 25.3 per cent stake in the entity, followed by Japanese Onix Corporation (23 per cent), HDFC (9.02 per cent), Central Bank of India (7.67 per cent) and SBI (6.42 per cent), according to BSE shareholding data.

According to India Today, IL&FS Financial Service has to repay about $500 million, but only has $27 million available with it. Both IL&FS and IL&FS Financial Services have a combined debt of $270 billion.

According to sources, this default will not only put at risk millions of its investors, but also major banks and big mutual funds who have exposure to housing finance companies.

Also Read: ING Group exits Kotak Mahindra Bank, sells 3% stake for Rs 7,171 crore

Edited by Chitranjan Kumar

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