MADRAS HIGH COURT QUASHES CHARGES AGAINST EX-CFO OF SKS MICROFINANCE
Five years after his arrest by the Enforcement Directorate (ED) during its probe into financial irregularities at First Leasing Company of India, the Madras High Court has quashed the prosecution of S. Dilli Raj, a former chief financial officer of Hyderabad-based microlender Bharat Financial Inclusion Ltd, under the Prevention of Money Laundering Act.
Commenting on the charges levelled against Mr Dilli Raj, a bench of the Madras High Court, comprising Justice P.N. Prakash and Justice V. Sivagnanam, opined that, "We are unable to persuade ourselves to agree with the Enforcement Directorate that the salaries and perquisites that were paid to Dilli Raj while he was in employment with FLCI would amount to proceeds of crime and any property purchased with that would stand tainted."
In its charges against Dilli Raj, the ED claimed that "the salaries, performance bonus and other perquisites paid to S. Dilli Raj, as a vice-president of FLCI during his tenure from 1996-2007, were out of bank borrowings fraudulently obtained by FLCI, which are nothing but proceeds of crime. Accordingly, it is found that the above said property is involved in money laundering."
Dilli Raj had quit Bharat Financial Inclusion Ltd, formerly SKS Microfinance, after he was arrested by the ED in 2016. He was a key member of the transition team at SKS Microfinance, which reoriented it away from its founder and microfinance sector's erstwhile poster boy Vikram Akula.