New Delhi: Personnel of the Serious Fraud Investigation Office (SFIO) arrested Friday former CEO of Infrastructure Financing and Leasing Services (IL&FS) Ramesh Bawa. He was nabbed after the Supreme Court refused to grant him extended protection from being apprehended. Bawa’s arrest came just two weeks after the chairman of the same company, Hari Sankaran was picked up on charges of fraud.
Bawa, it should be mentioned here, had resigned from the position in September last year. The matter on which he has been arrested relates to a series of defaults by the company on its debt obligations last year. He has been apprehended under Section 447 of the Companies Act which enables the investigating arm of Ministry of Corporate Affairs, the SFIO, to make an arrest for committing fraud.
The government took control of the heavily indebted infrastructure financing and construction group in October last year, following a string of defaults on debt obligations. It should be mentioned here that currently IL&FS is reeling under debts of Rs 91,000 crore.
After the arrest of Sankaran, the SFIO had said that he has been ‘apprehended on the grounds of abusing his powers in IL&FS Financial Services through his fraudulent conduct and in granting loans to entities which were not creditworthy’.
The alleged financial irregularities at the IL&FS came to light last year after some group entities defaulted on debt repayments.