Mumbai, Jun 19, 2019 : Two former top executives of IL&FS have been arrested by the Enforcement Directorate in connection with its money laundering probe in the crisis-hit lending firm’s alleged financial irregularities case, NDTV reported.
Former Joint Managing Director of IL&FS financial services Arun K Saha and Managing Director of IL&FS Transportation Network K Ramachand were arrested this evening in Mumbai, making them the first arrests by the Enforcement Directorate in the case.
The Enforcement Directorate had filed a money laundering case in February and had conducted raids on former executives twice.
Sources in the probe agency say IL&FS Financial Services "undertook various circuitous transactions through multilayering and floating of multiple bogus or shell companies to launder funds. A large chunk of the money was laundered through ILFS road arm ITNL and its subsidiary ILFS Rail".
In April, Hari Sankaran, former chairman and managing director of crisis-hit lender, was arrested by the Serious Fraud Investigation Office. The company’s former CEO Ramesh Bawa was also arrested by the agency in April.
Infrastructure Leasing & Financial Services, a major infrastructure financing and construction company, has a total debt of Rs. 91,000 crore and has been trying to sell its assets to repay debt after several defaults forced the government to overhaul its management.
The debt crisis at the infrastructure lender came to light after a series of defaults by its group companies from September last year.
The government took control of the heavily indebted infrastructure financing and construction group in October last year, following a string of defaults on debt obligations.
IL&FS first shocked markets when it postponed a $350 million bonds issuance in March 2018 due to demand for a higher yield from investors.
The Enforcement Directorate’s case is based on a First Information Report filed before the Economic Offences Wing (EOW) of the Delhi Police in December last year.
The director of an infrastructure firm had filed the case against officials of IL&FS Rail Ltd for allegedly causing Rs. 70 crore loss to his company by fraudulent means.