Former Vice-Chairman and MD of IL&FS held for fraud
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In the first major action by the Serious Fraud Investigation Office (SFIO) in the IL&FS case in Mumbai, Hari Sankaran, former vice-chairman and MD of the scandal-hit company was arrested on Monday for allegedly conspiring to commit fraud by funding defaulting borrowers, and indiscriminate lending to borrowers classified as NPAs, to injure the interest of the company and its creditors.
The SFIO arrested Sankaran, 58, at 3.30pm and produced him before a night metropolitan magistrate, who after hearing SFIO special counsel HS Venegaonkar, remanded him in police custody till April 4.
Venegaonkar said Sankaran's custody was needed to interrogate him "to ascertain the entire fraudulent activities'' and "role of other suspected persons involved'' and to "examine him for loans approved by him without proper collaterals and refinancing same entities to pay the interest and principal of previously sanctioned loans".
Sankaran's arrest was made under Section 447 of the Companies Act, which covers fraudulent conduct. Sankaran was arrested for allegedly abusing his powers in IL&FS Financial Services through his fraudulent conduct in granting loans to entities which were not creditworthy or have been declared non-performing assets and caused wrongful loss to the company and its creditors.
"Approximately Rs 17,000 crore has been raised by IFIN from public through bank loans, debentures, commercial papers and corporate deposits, etc," read the SFIO application.
The prime allegation is that though a NBFC, the company raised money from the market and other public fund sources in an "exercise carried out intentionally to unjustly enrich their own personal close friends at cost of public money''.
Sankaran said the SFIO, was "very much aware of the precarious condition of affairs of the company''. The ministry of corportae affairs had ordered a probe into the affairs of IL&FS through the SFIO in September. Venegaonkar said investigations into IL&FS and IFIN were in progress and his remand was essential. #casansaar (Source - TNN, Times of India)
The SFIO arrested Sankaran, 58, at 3.30pm and produced him before a night metropolitan magistrate, who after hearing SFIO special counsel HS Venegaonkar, remanded him in police custody till April 4.
Venegaonkar said Sankaran's custody was needed to interrogate him "to ascertain the entire fraudulent activities'' and "role of other suspected persons involved'' and to "examine him for loans approved by him without proper collaterals and refinancing same entities to pay the interest and principal of previously sanctioned loans".
Sankaran's arrest was made under Section 447 of the Companies Act, which covers fraudulent conduct. Sankaran was arrested for allegedly abusing his powers in IL&FS Financial Services through his fraudulent conduct in granting loans to entities which were not creditworthy or have been declared non-performing assets and caused wrongful loss to the company and its creditors.
"Approximately Rs 17,000 crore has been raised by IFIN from public through bank loans, debentures, commercial papers and corporate deposits, etc," read the SFIO application.
The prime allegation is that though a NBFC, the company raised money from the market and other public fund sources in an "exercise carried out intentionally to unjustly enrich their own personal close friends at cost of public money''.
Sankaran said the SFIO, was "very much aware of the precarious condition of affairs of the company''. The ministry of corportae affairs had ordered a probe into the affairs of IL&FS through the SFIO in September. Venegaonkar said investigations into IL&FS and IFIN were in progress and his remand was essential. #casansaar (Source - TNN, Times of India)
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