Former non-executive chairman of Infrastructure Leasing & Financial Services (IL&FS) Ravi Parthasarathy was arrested in Chennai on Friday by the Economic Offences Wing (EOW)-II. A press release from EOW-II mentioned he was arrested in a case registered in September final 12 months, whereas calling him a “kingpin and the mastermind of several crore IL&FS and ITNL financial scam”.
“The IL&FS group, which consists of over 300 group companies, was used as a vehicle to perpetrate one of independent India’s largest financial frauds by the management of IL&FS group, which was headed by the then chairman and the CEO, Ravi Parthasarathy,” the assertion mentioned.
The FIR was registered as per The Tamil Nadu Protection of Interest of Depositors (TNPID) Act, 1997 – which has powers to take motion towards monetary establishments that fail to return the deposit and curiosity – on a grievance by 63 Moons Technologies Ltd, which claimed to have misplaced a sum of Rs 200 crore. The assertion added the EOW-II had additionally acquired complaints from different depositors too.
Earlier, the anticipatory bail petition filed by Parthasarathy was dismissed by the Madras High Court. Hari Sankaran and Ramachand Karunakaran, former administrators and managing administrators of the corporate and “close aides” of Parthasarathy, had been already arrested by EOW-II.
After he was produced earlier than a TNPID court docket in Chennai, Parthasarathy was remanded to judicial custody.
On July 20, 2018, Parthasarathy resigned as non-executive chairman of IL&FS, the holding firm of the IL&FS group which he served for over 30 years. Parthasarathy, an alumnus of IIM Ahmedabad and co-founder of finance agency twentieth Century Finance, joined the IL&FS in 1987 as president & chief government officer and was appointed as managing director in 1989. Known within the company world for his deal-making expertise, he was later designated government chairman of the corporate. The overleveraged firm which executed among the main infrastructure tasks beneath the management of Parthasarathy, collapsed beneath a pile of debt.
On October 1, 2018, the federal government had moved the NCLT to supersede the board of IL&FS, which had defaulted on repayments to collectors. IL&FS owed lenders a whopping Rs 94,000 crore and has defaulted on a number of of its commitments. Rating businesses failed to identify the agency’s fragile funds, down-grading the corporate to junk standing in a matter of weeks.
The new board of IL&FS, led by Uday Kotak, found there was a posh net of over 250 firms which had been a part of the general IL&FS group, which has an excellent of over Rs 94,000 crore to lenders. Over 90 per cent of the flagship firm’s property are categorized as dud investments.
In February 2019, the Enforcement Directorate registered a case towards the IL&FS prime officers together with Parthasarathy, beneath the Prevention of Money Laundering Act (PMLA) and carried out raids throughout a number of areas.