Money laundering probe: ED searches offices, homes of 4 former IL&FS directorshttps://indianexpress.com/article/business/companies/money-laundering-probe-ed-searches-offices-homes-of-4-former-ilfs-directors-5743288/

Money laundering probe: ED searches offices, homes of 4 former IL&FS directors

The ED team in Mumbai, searched the offices and residences of Shahzaad Dalal, Rajesh Kotian, Manu Kochhar and Mukund Sapre at Nariman Point, Khar, Bandra and Goregoan in suburban Mumbai. 

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The ED case so far, is based on an FIR registered by the Economic Offences Wing of the Delhi Police against IL&FS Rail.

The Enforcement Directorate (ED) on Wednesday conducted searches at the offices and residences of four former directors of the IL&FS Group, in connection with its money laundering  probe into the defaults by the shadow lender.

The ED team in Mumbai, searched the offices and residences of Shahzaad Dalal, Rajesh Kotian, Manu Kochhar and Mukund Sapre at Nariman Point, Khar, Bandra and Goregoan in suburban Mumbai.

While Dalal and Kochhar were the former directors of IL&FS Financial Services Ltd (IFIN), Kotian was the executive director of IFIN and Sapre was the managing director of IL&FS Engineering and Construction Company.

Earlier in February, ED had searched Ravi Parthasarthy, former chairman of IL&FS and former managing director Hari Sankaran and a few top officials of IL&FS Rail in connection with the money laundering case registered by the agency on February 19.

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The ED case so far, is based on an FIR registered by the Economic Offences Wing of the Delhi Police against IL&FS Rail.

IL&FS Rail is a subsidiary of IL&FS Transportation Networks Ltd. The IL&FS Group that has total liabilities of Rs 94,000 crore has also come under the scanner of the Serious Fraud Investigation Office (SFIO). The SFIO has found several irregularities across corporate governance and financial parameters that led to a default crisis at IL&FS. Sources said the ED is likely to widen its probe to include other IL&FS group companies apart from IL&FS Rail.

Explained

Probe agencies expanding the investigation

The search by Enforcement Directorate (ED) at offices and residences of four former directors of IL&FS group after arrests of Hari Sankaran, former chairman and managing director of IL&FS and Ramesh C Bawa former MD and chief executive officer of IL&FS Financial Service Limited (IFIN) by the Serious Fraud Investigation Office (SFIO) in April, indicates that the investigating agencies are expanding the probe. The role of other directors and executives, who may have played a role in the alleged cases of impropriety in the affairs of IL&FS Group, are now being investigated.

Last month, ED restrained Shahzaad Dalal from selling his South Mumbai property, as a part of its probe.

In a separate development, sources said that the new IL&FS board which had earlier sent notices to the 14 former directors of IFIN for “facilitating money laundering,” sanctioning loans without any security and “conspiracy and getting unlawful gains,” is contemplating to register a FIR with the police against some of the IL&FS Group companies and their former directors.

In April, the SFIO arrested IFIN’s former MD and CEO Ramesh C Bawa and Hari Sankaran, former chairman and managing director of IL&FS, for alleged fraud in granting loans. The fraud office has alleged that these two officials were involved in mismanagement, fudging of accounts and non-disclosure of NPAs. Both are currently in judicial custody.

An interim report of the SFIO said it has found multiple instances of evergreening of loans at IL&FS Financial Services Ltd which helped it “deflate” its provisioning of non-performing assets (NPAs), project a “strong balance sheet” and “inflate its financial performance”.

The alleged financial irregularities at IL&FS came to light last September, after some group entities started defaulting on debt repayments.

The entire group has been defaulting on repayments since then.

The government subsequently superseded the company’s board, and appointed a new management to work on a resolution plan.