‘Ex-CEO of IFIN helped rat­ing agency of­fi­cial buy multi-crore villa at a dis­count’

The Hindu Business Line - - NEWS -

In­ves­ti­ga­tion into the high­pro­file IL&FS fraud showed that the then CEO of the group’s fi­nan­cial ser­vices arm IL&FS Fi­nan­cial Ser­vices Ltd (IFIN) helped a se­nior direc­tor of a lead­ing rat­ing agency buy a du­plex villa worth crores at a dis­count when an im­por­tant cir­cuitous trans­ac­tion with a de­faulter bor­rower was un­der way in 2012-13.

The probe by the Se­ri­ous Fraud In­ves­ti­ga­tion Of­fice (SFIO) has al­ready un­earthed con­nivance of au­di­tors and in­de­pen­dent di­rec­tors with the then top man­age­ment of IFIN in de­fraud­ing the com­pany.

As per the in­ves­ti­ga­tion re­port, which is part of the first chargeshee­t filed by the SFIO, IFIN and other en­ti­ties from the IL&FS group con­tin­ued to en­joy high rat­ings from var­i­ous rat­ing agen­cies, in­clud­ing due to win­dow-dress­ing of the com­pany books.

As per the re­port, a part of a loan dis­bursed to the SIVA Group was used to pay IFIN for the li­a­bil­i­ties aris­ing out of a debt syn­di­ca­tion fee.

The probe showed that in 2012-13, SIVA Ven­tures had an out­stand­ing li­a­bil­ity against Unitech, while an out­stand­ing loan of IFIN to Unitech was also over­due.

The SFIO probe has re­vealed that the IFIN top man­age­ment de­cided to bail out the SIVA group by fund­ing the re­pay­ment of the li­a­bil­i­ties of Unitech to­wards SIVA Ven­tures. Ac­cord­ingly, ₹125 crore was dis­bu­red to the Unitech group to help it clear dues of ap­prox­i­mately ₹80 crore and con­sec­u­tively for SIVA to clear the loans of IFIN. In this trans­ac­tion, IFIN not only self-funded its ad­vi­sory in­come of ₹8 crore but also granted ad­di­tional loans of ap­prox­i­mately ₹45 crore.

How­ever, post trans­ac­tion, the SIVA group was al­lowed to utilise ap­prox­i­mately ₹40 crore to close a loan of Union Bank of In­dia.

“Fur­ther, in the in­terim of this trans­ac­tion, Ramesh Bawa (who was then CEO and MD of IFIN) also as­sisted a se­nior direc­tor in Fitch Rat­ings, Sin­ga­pore, who ap­pears to be in­volved in the rat­ing of IL&FS, in buying a du­plex villa of ₹4.25 crore at a dis­counted price of ₹3.25 crore,” the probe re­port says.

When con­tacted, a Fitch Rat­ings spokesper­son said, “We are un­able to com­ment on it.”

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