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Home / Business News / Former director of IL&FS remanded in judicial custody for a fortnight

Former director of IL&FS remanded in judicial custody for a fortnight

Hari Sankaran, who was arrested on Monday as part of the investigation into the affairs of IL&FS and its subsidiaries, including IL&FS Financial Services Limited (IFIN), has been remanded in judicial custody for 14 days.

business Updated: Apr 05, 2019 10:21 IST
HT Correspondent
HT Correspondent
Mumbai
Former director of  IL&FS  Hari Sankaran
Former director of IL&FS Hari Sankaran(Mint / File Photo )

The salary and perks of Hari Sankaran, former director of Infrastructure Leasing and Financial Services (IL&FS), were fraudulently drawn from public resources, the serious fraud investigation office (SFIO) told the court on Thursday. Sankaran, who was arrested on Monday as part of the investigation into the affairs of IL&FS and its subsidiaries, including IL&FS Financial Services Limited (IFIN), has been remanded in judicial custody for 14 days.

SFIO, which investigates white-collar crimes, told the court that Sankaran was desperately trying to find alternate sources to borrow money and contemplated winding up sick entities while trying to sell the business, as he and the management were aware of the firms’ precarious condition.

According to SFIO, Sankaran sanctioned a loan of Rs 175 crore to C Sivasankar of the Siva Group because of their personal relationship, despite not being able to recover the Rs 500 crore loan previously sanctioned to the firm. Although these loans affected the IFIN’s asset quality, the new loans were projected as fresh lending on paper. “This exercise was carried out to favour and unjustly enrich their close friends at the cost of public money,” SFIO submitted. It also found emails which show borrowers offered IL&FS executives various benefits.

SFIO stated that IFIN raised Rs17,000 crore from different public sources, such as bank loads, debentured commercial papers, etc, which was used to advance loans to debt-ridden group companies. It alleged that Sankaran abused his position and founded the company“by funding the borrowers… essentially funding its own top-line from the public funds.” The firm used fraudulent financial statements to access public funds, it said.

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