The scam surfaced in July last year when IL&FS started defaulting on its debt repayments due to a severe liquidity crisis. The company borrowed Rs 91,000 crore in various ways, including availing credit from public sector banks.
The Enforcement Directorate (ED) has arrested the former Joint Managing Director of IL&FS financial services Arun K Saha and Managing Director of IL&FS Transportation Network K Ramchand, its first arrest in the IL&FS case.
The Serious Fraud Investigation Office (SFIO) had earlier arrested RC Bawa and Hari Sankaran, and both are in judicial custody. The SFIO's chargesheet, which was filed on May 31 in front of a special court, had accused 30 entities and individuals of various violations and offences, including financial fraud.
The SFIO investigation also revealed that the Securities and Exchange Board of India, and auditor Deloitte, failed to check the end use of Non- Convertible Debentures (NCDs) raised by IL&FS Financial Services (IFIN).
The Ministry of Corporate Affairs (MCA) first moved the National Company Law Tribunal in September last year. Recently, the MCA has moved National Company Law Tribunal (NCLT) seeking to bar Deloitte Haskins & Sells and BSR & Associates Llp from audit practice for five years for their alleged involvement in the financial mismanagement at IL&FS Group.
The government superseded the board of IL&FS with a new board in October, with eminent banker Uday Kotak as its executive chairman.
The SFIO uncovered shocking details of wrongdoing in the embattled group, with instances of misreporting of income, dubious transactions, conflict of interest, the ever-greening of loans and personal enrichment of key employees being shown as rampant.The scam surfaced in July last year when IL&FS started defaulting on its debt repayments due to a severe liquidity crisis. The company borrowed Rs 91,000 crore in various ways, including availing credit from public sector banks.