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Strike One For SFIO: Former Vice Chairman Of IL&FS Hari Sankaran Arrested On Charge Of Fraud
IL&FS headquarters in Mumbai (Wikipedia/IL&FS)
Authorities on Monday (1 April) arrested former vice chairman of IL&FS Hari Sankaran in Mumbai for fraud and causing wrongful loss to the financially-stressed infrastructure NBFC, reports Business Standard (BS).
With this arrest, Sankaran becomes the first IL&FS executive to be arrested by the Serious Fraud Investigation Office (SFIO) in the case. Charges of abuse of powers in IL&FS Financial Services Ltd through fraudulent conduct and in granting loans to entities that did not have adequate credit-worthiness or were declared as non-performing accounts have been brought against him. It is alleged that his actions have resulted in wrongful losses to the company and its creditors.
The Serious Fraud Investigation Office (SFIO) has been granted custody of Sankaran till April 4. SFIO is statutory corporate fraud investigating agency in India working under the direction of Ministry of Corporate Affairs (MCA).
IL&FS, one of India’s top non-banking financial companies (NBFCs) that lent heavily to big infrastructure projects, defaulted on its loan repayments in September 2018. This default triggered a market-wide liquidity crisis in the Indian financial system. At the time, the company had an accumulated debt of Rs 91,000 crore.
Following the default, the government moved swiftly and replaced the company’s board with its nominees, including Uday Kotak, the government's banking crisis manager. Restructuring of the company is underway.
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