IL&FS Crisis: Enforcement Directorate Conducts Fresh Raids In Mumbai, New Delhi

The Enforcement Directorate on Wednesday carried out fresh searches in Mumbai in connection with its money laundering probe in the multi-crore Infrastructure Leasing and Financial Services Ltd. crisis, officials said. They said the residences and offices of at least four directors of IL&FS are being raided.

The central agency had first carried out searches in this case in February after it filed a criminal case under the Prevention of Money Laundering Act.

The IL&FS raids are aimed at collecting additional evidences and documents, they said.

The IL&FS crisis came to light following a series of defaults by its group companies beginning Sep. 2018.

IL&FS has defaulted on payment of loans to Small Industries Development Bank of India and along with its subsidiaries has a combined debt of over Rs 91,000 crore.

The ED's case is based on a first information report filed before the Economic Offences Wing of the Delhi Police in December last year.

Ashish Begwani, Director of Enso Infrastructures Pvt. Ltd., had filed the case against officials of IL&FS Rail Ltd. for allegedly causing Rs 70 crore loss to his company by fraudulent means.

Begwani had alleged in his complaint that in August 2010, he was approached by two officials of IL&FS Transportation Networks Ltd. and he had invested Rs 170 crore in IL&FS Rail Ltd., a special purpose vehicle for Gurugram Metro project, in order to take its 15 percent shares.

"However, over a period of time, the complainant observed that the company is not performing profitably and funds are being misused," an EOW official had said quoting Begwani's complaint.

The ED will probe if funds generated illegally in this case were laundered to create illegitimate assets by the accused.

The crisis-ridden IL&FS Group, once hailed as a pioneer of public-private partnership, has come under the scanner of multiple regulators, for alleged defaults related to financial disclosures and corporate governance.