In a major development, the Tamil Nadu Police on Friday has arrested former chief of Infrastructure Leasing & Financial Services (IL&FS) Ravi Parthasarathy.
Parthasarathy was arrested on Friday by the economic offences wing (EOW) of Chennai Police in connection with a Rs 200 crore cheating and criminal breach of trust case filed by 63 Moon Technologies Ltd.
"The kingpin and the mastermind of the 1 lakh crore IL&FS scam Mr. Ravi Parthasarathy has been arrested by EOW in connection with Crime No.13 of 2020 dated 20.09.2020," a statement issued by EOW Chennai said.
Later, a special court for cases under the Tamil Nadu Protection of Interest of Depositors Act (TNPID) in Chennai ordered 15 days of judicial custody of Parthasarathy.
"The accused, Ravi Parthasarathy, is the former Chairman and Managing Director of the entire IL&FS Group. The IL&FS Group, which consists of more than 350 group companies, was used as a vehicle to perpetrate fraud by then management of IL&FS Group which was headed by the then chairman and MD-CEO Ravi Parthasarathy," said the EOW.
The scam at IL&FS came to light in 2018 after several group entities defaulted on repayments due to severe liquidity problems. Later, the government superseded the board of directors, which is now working on ways to revive the ailing group.
IFIN, which has been found to be funding its own revenues for several years, was the main source of funds for the IL&FS group entities. The group had accumulated a debt burden of more than Rs 90,000 crore.
The company converted the funds of banks and the public as profit with fraudulent lending activities, while the profits were also utilised for payment of managerial remuneration and dividend to the holding company.
The officials noted that the audit committee did not raise any red flag even when there were instances of "disbursal and bullet recovery of loans" on the same day or within a few days.
IFIN's lending to group companies jumped to around Rs 5,200 crore, which was 37 percent of the company's total loans and advances in the 2017-18 fiscal.
The probe also found that IFIN's audit committee overlooked numerous impairment indicators and actively connived with the management to present a good picture of the company's financials to prospective investors.
According to the findings, incorrect half-yearly financial statements were of great significance as they were being used by the rating agencies for new as well as surveillance ratings. These statements were also used for market borrowings.
(Edited by: By Jomy Jos Pullokaran)
First Published: IST