Enforcement Directorate Likely To Initiate A Second Probe Into IFIN Transactions To Unearth Possible Money Laundering

The Enforcement Directorate is likely to investigate the transactions of IL&FS Financial Services (IFIN) for possible money laundering, by registering a second case under the Prevention of Money Laundering Act (PMLA).

The new investigation will focus on six erstwhile IFIN directors including Ravi Parthasarathy, Hari Sankaran and Ramesh Bawa, as well as others including C Sivasankaran and his group firms which borrowed money from the company.

Incidentally, all of them have been named in a Serious Fraud Investigation Office (SFIO) charge sheet filed before a special court in Mumbai on May 30.

The company’s auditors BSR & Associates, Deloitte Haskins & Sells (DHS), audit committee members and independent directors have also been named in the same SFIO charge sheet, under various sections of the Companies Act and the Indian Penal Code.

Apparently, an Enforcement Directorate scrutiny of IFIN’s books points towards circuitous transactions among companies which warrant detailed investigation under the Prevention of Money Laundering Act (PMLA).

Such circuitous transactions seem to have been undertaken through multi-layering and floating of multiple bogus companies or shell companies, seemingly with the sole purpose of laundering funds.

Allegedly, the biggest chunk of these funds is that of IL&FS road arm ITNL, whose subsidiary IL&FS Rail is being probed.

It has been revealed that IFIN gave a lot of loans to ITNL in order to keep it afloat. All these transactions taken together seem interlinked and part of a larger conspiracy to launder funds.