New Delhi
The recent chargesheet filed by the SFIO in the IL&FS matter shows that the management of its subsidiary IL&FS Financial Services (IFIN) devised an illegal strategy to lend money to its group companies in violation of the Reserve Bank of India’s (RBI) guidelines.
As per the chargesheet, IFIN carried out lending to eight companies “without any due diligence or verification of actual requirement of funds, and without ensuring adequate security cover for these entities.” Those charged by SFIO include former IL&FS VC Hari Sankaran and former IFIN MD Ramesh Bawa, both under arrest.
“Investigation revealed that in case of lending to group entity i.e. IL&FS Transport Network Ltd (ITNL) in breach of RBI guidelines/directions, the management of the IFIN devised an illegal strategy for IFIN to lend the money to its group companies,” it said.
The purpose mentioned for borrowing the funds were very vague and general, revealed the investigation.
Another modus operandi undertaken by the erstwhile IFIN management was that of lending to group entities through third party vendors, the probe revealed.
“In order to do so, the books of accounts of fourteen existing borrowers or contractors of IFIN or ITNL such as Beigh Construction, GHV group, New India Structures Pvt Ltd, Avance Technologies Ltd and Empower Indian Ltd were used for onward lending to ITNL or its subsidiaries/SPVs. All the loans given to these entities have been given on the basis of letter of comfort of ITNL and no security has been taken form these borrowing entities/intermediaries,” said the chargesheet. Such fraudulent transactions were taken up to bypass the RBI directions on group lending, the chargesheet said.
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