IL&FS Case: Former MD & CEO Ramesh Bawa arrested by SFIO

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The Serious Fraud Investigation Office (SFIO) on April 13 took into custody former IL&FS Financial Services CEO and MD Ramesh Bawa. The arrest comes as part of SFIO’s investigation into IL&FS and its group companies.

Bawa was reportedly taken into custody late last night in New Delhi. This is after the Supreme Court recently refused to grant him protection from the arrest. He is currently lodged in Mumbai’s Byculla district jail.

Bawa resigned from his position in September 2018, after a series of defaults by IL&FS had sent fears of a market crisis. The default prompted DSP Mutual Fund to sell commercial papers of DHFL which led to contagion effect in equity markets which tanked 1500 points.

This is the second arrest made by the SFIO in the case. Earlier this month, the agency had arrested former IL&FS chairman Hari Sankaran.

Sankaran had been arrested on grounds of abusing his powers in the company through his fraudulent conduct and granting loans to entities that were not creditworthy or have been declared non-performing assets (NPAs) thereby causing wrongful loss to the company and its creditors.

IL&FS Financial Services had borrowings of over Rs 17,000 crore from debt instruments and bank loans. Provident funds, pension funds, gratuity funds, mutual funds, public and private sector banks, are among those who have invested in these debt instruments.

The Enforcement Directorate (ED) is investigating the alleged money laundering of Rs 2,364 crore from the books of IL&FS Financial Service Limited (IFIN), identified in a forensic audit performed by Grant Thornton.

Moneycontrol has reviewed the interim Grant Thornton report which was submitted to the new board of IL&FS on February 20.



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