Strike One For SFIO: Former Vice Chairman Of IL&FS Hari Sankaran Arrested On Charge Of FraudIL&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).

The Crisis

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.

Also Read: IL&FS Rescue: A Direct, But Temporary, Government Takeover May Be Less Expensive

An Appeal...

Dear Reader,

As you are no doubt aware, Swarajya is a media product that is directly dependent on support from its readers in the form of subscriptions. We do not have the muscle and backing of a large media conglomerate nor are we playing for the large advertisement sweep-stake.

Our business model is you and your subscription. And in challenging times like these, we need your support now more than ever.

We deliver over 10 - 15 high quality articles with expert insights and views. From 7AM in the morning to 10PM late night we operate to ensure you, the reader, get to see what is just right.

Becoming a Patron or a subscriber for as little as Rs 1200/year is the best way you can support our efforts.

Become A Patron
Become A Subscriber