Former IL&FS Directors Get Show- Cause Notice On Money laundering, Fraud, Payoff Charges
A show- cause notice was issued to 14 former board directors of IL&FS on charges of “facilitating money laundering,” sanctioning loans without any security and “conspiracy and getting unlawful gains,” among others by the new management of the firm.
These 14 include former IL&FS chairman Ravi Parthasarathy and Hari Sankaran (former vice chairman).
The charges include specific instances of directors of a borrower entity, who also happened to be directors of IL&FS group companies, and a case where a large portion of the loan given to a company was later transferred into the account of its directors.
Giving them a time of seven days to respond to these allegations, the company has threatened to initiate departmental and legal action against the directors.
In one of the eight charges against the directors, the notice said: “You have been responsible for facilitating money laundering by following entities who have diverted the loan amount to individual accounts of the directors of the borrow company.
In one instance, Shri Siddharth Dinesh Mehta, the director of the borrower company has been a director of IL&FS group company IEDCL. Inspite of above, you failed to take any action which shows conspiracy in loan sanctioning.”
In another example cited in the notice, the company states that of the Rs 100 crore loan to Prism International Private Limited, a unit of Gateway Distriparks Group, Rs 82.5 crore was transferred into the account of a director of the borrower company, Prem Kishan Gupta. In fact, Gupta is the chairman and MD of Gateway Distriparks.
In another case, of the loan of Rs 28.99 crore to Bay Capital’s Indus Equicap Consultancy, Rs 2.95 crore was transferred to personal account of Siddharth Dinesh Mehta who was both a director of the borrower company and also a director in IL&FS group company IEDCL.
Another notice states that that of the loan of Rs 515.5 crore given to Flemingo Geowork’s Infra Projects Pvt Ltd, Rs 8.81 crore was transferred into the account of Viren Ahuja, the promoter of the borrower company. The directors have also been charged with extending loans for “criminal intent and falsification of repayment” by a number of borrowers.
The IL&FS management has, in its notice, flagged irregularities and misconduct in transactions in excess of Rs 7,100 crore during the five-year period ending September 2018.