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Wednesday, May 10, 2023

ED raids premises of two former IL&FS auditors in money-laundering case - The Economic Times

The Enforcement Directorate (ED) sleuths today raided premises of two former auditor firms of IL&FS in connection with its money-laundering probe into alleged financial irregularities at the infrastructure development and finance company.

ED conducted searches at premises of BSR and Associates and Deloitte Haskins and Sells under the provisions of the Prevention of Money Laundering Act (PMLA), PTI reported citing officials.


This came just a week after the Supreme Court set aside a Bombay High Court verdict that quashed an SFIO probe against the two companies, 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.
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Infrastructure Leasing and Financial Services Limited (IL&FS) filed for bankruptcy in 2018.
The Serious Fraud Investigation Office (SFIO) is an agency under the corporate affairs ministry that investigates and prosecutes white collar crimes and frauds.
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ED had started the money-laundering probe into the alleged financial irregularities at IL&FS 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.

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

The ED 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, which subsequently filed a chargesheet before a special PMLA court in Mumbai.

According to ED, 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.

The ED 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.

With PTI Inputs

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ED raids premises of two former IL&FS auditors in money-laundering case - The Economic Times
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