Wednesday, October 28, 2020

India: ED arrests two former IL&FS executives in alleged money laundering case

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The Enforcement Directorate (ED) on Wednesday arrested two former top executives — Arun Kumar Saha and Karunakaran Ramchand — for their alleged involvement in activities at Infrastructure Leasing & Financial Services (IL&FS) group.

Saha was former joint managing director (MD) of IL&FS Financial Services, while Ramchand was former MD of IL&FS Transportation Networks (ITNL).

Confirming the development, a senior official told Business Standard that they were arrested under Section 19 of the Prevention and Act (PMLA). The had registered the enforcement case investigation report (Ecir) on February 19. They will both be presented on Thursday at a special court of PMLA in Mumbai, the official added.

Hari Shankaran, ex-chairman, il&fs, had already been arrested by the SFIO. According to the ED, the PMLA investigation revealed that Saha and Ramchand, who were also members of the Committee of Directors of (IFIN), were involved in “illegal activities”.

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“They were involved in sanctioning and disbursement of loan without taking proper security to the group companies, which were already in financial distress and unable to pay earlier loans,” the said.

Further, they were involved in indirectly routing funds from IFIN to ITNL through the third party, which was the contractor of ITNL — a flagrant violation of RBI norms.

The ED said both of them were not cooperating and were evasive while responding on the issues. Both the officials, being part of the top management earlier as well as being influential people, may try to influence witnesses and destroy evidence. Therefore, they were arrested under Section 19 of the PMLA Act, it noted.

The enforcement agency examining the books of IFIN and other subsidiaries found significant transactions between group firms such IL&FS Rail and Transportation Networks. It was also observed that groups firms had done so deliberately, with an intent to siphon off the loan amount.

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