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IL&FS money laundering case: ED summons Maha NCP president

IL&FS had an aggregate debt burden of more than Rs 91,000 crore and a series of defaults

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MUMBAI, May 11 (PTI): The Enforcement Directorate (ED) has summoned Maharashtra NCP president and MLA Jayant Patil for questioning in a money laundering case linked to alleged financial irregularities in the now bankrupt financial services firm IL&FS, official sources said Thursday.

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The 61-year-old MLA from Islampur seat of Maharashtra has been asked to depose before the federal agency here on Friday, they said.

Patil, a former minister of home and finance, is also the state president of the Nationalist Congress Party (NCP) and is a seven-term legislator.

Alleged payment of some “commission amount” by some accused companies to entities linked to Patil are under the scanner of the agency and it is understood he will be questioned about these transactions and his statement recorded under the provisions of the Prevention of Money Laundering Act (PMLA).

The agency has recently initiated fresh action in this 2019 case after it searched the Mumbai offices of Deloitte Haskins and Sells and BSR and Associates, an Indian affiliate of global accounting firm KPMG, the two former auditors of IL&FS.

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The Infrastructure Leasing and Financial Services Limited (IL&FS) filed for bankruptcy in 2018.

The search action against the two auditors came a week after the Supreme Court set aside a Bombay High Court verdict that quashed an SFIO probe against the two companies, both former auditors of IL&FS Financial Services, paving the way for action against them under the Companies Act and allowing the National Company Law Tribunal (NCLT) to take forward its enquiry against them.

The Serious Fraud Investigation Office (SFIO) is an agency under the Ministry of Corporate Affairs that investigates and prosecutes white collar crimes and frauds.

The money laundering probe into the alleged financial irregularities at IL&FS was launched by the ED in 2019 after the federal agency took cognisance of a Delhi Police Economic Offences Wing (EOW) FIR filed against IRL, ITNL (group companies of IL&FS), its officials and others.

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The ED also took cognisance of a complaint filed by the SFIO against IL&FS Financial Services (IFIN) and its officials.

The agency had also attached assets of various entities in this case in the past.

Arun Kumar Saha, one of the former members of the committee of directors of IFIN, and Karunakaran Ramchand, former managing director of ITNL, were arrested by the ED. A charge sheet was also filed by the ED before a special PMLA court in Mumbai.

The agency alleged in the charge sheet that the senior management of IL&FS indulged in acts of commissions and omissions, leading to illegal personal gains to them at the expense of the company.

It had said in order to maintain the credentials of IFIN – so that they could continue to receive high remuneration – the directors allegedly falsified the accounts and indulged in “circuitous transactions” to artificially boost the balance sheet of the IL&FS group, whereas in reality, these illegal activities were leading to further losses to the group.

According to records, the IL&FS group companies had an aggregate debt burden of more than Rs 91,000 crore and a series of defaults had taken place between June and September in 2018, threatening to collapse the money markets of India.

This had led to initiation of action against the firms and their auditors.

The Union government took the management control of IL&FS and appointed a new board in October 2018 in an effort to control defaults and restore confidence and financial stability in capital markets.


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