IL&FS Payment Crisis: Former MD & CEO of the Company Ramesh Bawa arrested by SFIO

April 13, 2019:

On Saturday, the Serious Fraud Investigation Office (SFIO) arrested former IL&FS Financial Services (IFIN) MD & CEO, Ramesh Bawa in the case.

This is the second arrest made by the investigation arm of the Ministry of Corporate Affairs (MCA).

According to a source, Bawa was arrested late last night in Delhi. This, after the Supreme Court (SC) recently refused to extend relief of granting him protection from arrest.

Earlier this month, the Agency had arrested Hari Sankaran, the former vice chairman of IL&FS. He is currently lodged in Mumbai’s Byculla district jail.

Like Sankaran, Bawa too has been arrested under Section 447 of the Companies Act that empowers the agency to make an arrest for committing fraud.

In a recent press conference, the incumbent government appointed IL&FS board had said that IFIN has a total exposure of ₹18,800 crore, out of which ₹10,700 crore is to external agencies while the remainder is with group companies.

Other than SFIO, the Enforcement Directorate is also probing the alleged irregularities in IFIN. In Feb the central agency had registered a money laundering case against ILFS Rail Ltd, ILF Transportation Networks Ltd, Ravi Parthasarthy, former chairman and managing director of IL&FS and Hari Sankaran and Bawa.

According to ED the accused in this case floated bogus/shell companies to award work contract with vague details, siphoned off ₹74 crore which was used by purchase individual assets.

The bogus/ shell companies were given a commission of 0.5% of the amount routed by them. While the present case deals with subsidiaries of IL&FS, sources add that the ED would eventually probe IL&FS and its entire debt burden of ₹91,000 crore.

In Nov, SFIO had placed an interim report detailing out the alleged irregularities surrounding IL&FS. It recommended that the assets of the key managerial individuals may be considered for restrainment under the provision of the Companies Act, 2013 by the Central Govt.

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