Foreign trips, private jet travels, chopper riders and interior decoration at houses aboard -- the probe into the IL&FS saga has unearthed many such inducements that the top brass allegedly got from borrowers in return for faster loans and delayed recoveries.
As large-scale manipulations continue to unravel at the once-mighty group, an investigation by the government's white-collar fraud probe agency SFIO has revealed several cases where the top brass got personal benefits from the borrowers of IL&FS Financial Services Ltd (IFIN), the non-banking financial services arm of the Infrastructure Leasing and Financial Services (IL&FS).
E-mail trails have revealed deep-rooted connivance between former senior IL&FS officials and Siva Group Chairman C Sivasankaran as loans continued to be ever greened and recoveries delayed, according to officials.
The SFIO (Serious Fraud Investigation Office) probe into the affairs of IFIN found that the company had entered into 15 transactions of advancing loans to or investing in debentures of Siva Group companies.
Officials said repayment of loans pertaining to only four transactions were done among the total 15 transactions.
Based on e mail data, the probe agency found that Sivasankaran arranged hospitality for at least three executives -- Ravi Parthsarathy, Vibhav Kapoor and Hari Sankaran.
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These included foreign travels, private jets and helicopter rides, booking of resorts and even arranging for interiors of some flats in Brussels (Belgium), according to the officials.
In return, the three officials were found to have connived with Sivasankaran and influenced decision-making process at IFIN, including those related to recovery and disbursement of loans and fees, they added.
Sivasankaran, described as the "controlling will and mind of the Siva Group", had personal relationship with Ravi Parthasarathy and Hari Sankaran, as per the chargesheet filed by the SFIO last week.
New loans were extended to the group to facilitate repayment of existing loans, which were required to be classified as non-performing assets.
The fraudulent circuitous transactions among IFIN and Siva Group companies had aided to project a rosy picture of financial statements and defraud the lenders of IFIN, the officials said.
The massive scam at IL&FS came to light last year after several group entities defaulted on repayments due to liquidity crunch. Amid the situation raising concerns about the overall financial system, the government superseded the IL&FS board.
At the end of March 2018, the sprawling IL&FS group's debt burden was estimated to be more than Rs 90,000 crore.
The SFIO has filed the first chargesheet after inspecting accounts of nearly 400 entities, an extensive forensic audit, data collected from desktops and laptops seized from various IL&FS offices as well as e mails extracted from IL&FS servers. Besides, RBI inspection reports, minutes of meetings, assessment reports from the government-appointed IL&FS board and other documents were also taken into consideration.
The chargesheet, filed before a special court in Mumbai, has accused 30 entities/ individuals of various violations and offences, including of financial fraud.
The former top-management members of IFIN have been charged with committing fraud with intent to injure the interest of the company, its shareholders and creditors, resulting in wrongful loss to the company.
The white collar crime probe agency has charged former top management members of IFIN of forming a "coterie" with its auditors and independent directors to defraud the company while running the business as their "personal fiefdom".
The 'coterie' identified by SFIO included Ravi Parthasarthy, Hari Sankaran, Arun Saha, Ramesh Bawa, Vibhav Kapoor and K Ramchand, who were in the top management of various IL&FS firms.
SFIO said its probe revealed that IFIN, as an NBFC, extended loans to companies of Siva, ABG, A2Z, Parsvnath and other corporate groups, though a number of them were not servicing their debt obligations timely.
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