Hari Sankaran, former managing director and vice-chairman of Infrastructure Leasing and Financial Services (IL&FS), was arrested by the Serious Fraud Investigation Office (SFIO) in Mumbai on Monday in connection with ongoing investigations into IL&FS defaults last year, according to reports. Sankaran is said to have abused his powers in IL&FS Financial Services. Sankaran has been granted SFIO custody until April 4.
Sankaran has been arrested on the grounds of abusing his powers in IL&FS Financial Services through his fraudulent conduct and granting loans to entities that were not creditworthy or have been declared non-performing assets (NPAs) thereby causing wrongful loss to the company and its creditors, according to SFIO statement.
IL&FS Financial Services had borrowings of more than Rs 17,000 crore through debt instruments and bank loans. Provident funds, pension funds, gratuity funds, mutual funds, public and private sector banks, are among those who have invested in these debt instruments, the sources said. The alleged financial irregularities at the IL&FS came to light last year after some group entities defaulted on debt repayments. The government, which superseded the company's board, is working on a resolution plan.
(With PTI inputs)