2 former top executives arrested in IL & FS money laundering case


IL & FS first shocked the markets when it postponed a bond issue of $ 350 million in March 2018


Two former senior executives of IL & FS were arrested by the Executive Board in connection with their investigation into money laundering in the alleged case of financial irregularities of the crisis lending firm.

Former IL & FS joint managing director of financial services Arun K Saha and the managing director of the IL & FS Transport Network, K Ramachand, were arrested this evening in Mumbai, making them the first prisons of the Enforcement Board in case.

The Execution Board filed a money laundering case in February and took action against former executives twice.

Sources at the investigation agency say that IL & FS Financial Services "performed multiple transactions through multilayer and fluctuations of various fake companies or shell for money laundering. A large part of the money was laundered through ITNL and its subsidiary ILFS Rail."

In April, Hari Sankaran, a former chairman and managing director of the bank, was arrested by the Serious Fraud Investigation Office. The former CEO of the company, Ramesh Bawa, was also arrested by the agency in April.

Infrastructure Leasing & Financial Services, a major infrastructure finance and construction company, has total debt of 91,000 crore and tries to sell its assets to pay its debts after several defaults forced the government to restructure its administration.

The debt crisis in the infrastructure lender came to light after a series of defaults from its group companies as of September last year.

The government took over the heavily indebted finance and infrastructure construction group in October last year after a series of defaults on debt obligations.

IL & FS first shocked the markets when it postponed issuing $ 350 million bonds in March 2018 due to demand for higher investor yields.

The Execution Board's case is based on a First Information Report filed with the Delhi Police Offense Wing (EOW) in December last year.

The director of an infrastructure company filed the case against IL & FS Rail Ltd employees for allegedly causing a loss of Rs 70 crore to his company by fraudulent means.

With PTI entries


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