The Serious Fraud Investigation Office (SFIO), whose chargesheet against the IL&FS group subsidiary, IL&FS Financial Services (IFIN), was admitted by a Mumbai sessions court on Friday, has alleged that Aircel founder and serial entrepreneur C Sivasankaran got loans sanctioned to the cash-strapped Unitech group so as to recover his dues from the real estate firm. The money Sivasankaran received through this collusion with the IFIN management was then used by him to repay his dues to the latter.
In another transaction with collusion of the management, IFIN had been used by Sivasankaran to ensure that his outstanding loans due from Unitech group are paid back. In the month of April 2012, accounts of Unitech group were stressed and repayments from the group to IFIN were not happening. Sivasankaran connived with management of IFIN and accordingly, IFIN sanctioned and disbursed a loan of Rs 125 crore to Unitech group which was used by Unitech group to repay the liabilities of SIVA Ventures, SFIO claimed in the chargesheet.
The investigating agency, which is part of the ministry of corporate affairs (MCA), alleged that this Rs 125 crore loan to the Unitech group was utilised by the real estate firm to clear dues amounting to Rs 80 crore to Sivasankaran, who then used the money to clear his dues to IFIN.
SFIO in its report has also alleged that this was being done in connivance with IL&FS and IFIN top management. That connivance between Sivasankaran and IFIN officials is also proved from the mail on January 1, 2012 in which Sivasankaran asked Ravi Parthasarthy (chairman IL&FS group) to discuss the issue concerning Ackruti, Unitech and L&T, which establishes that companies of Siva groups were getting wrongful gains from IFIN and Sivasankaran with connivance of the top management injured the interest of IFIN, the chargesheet said.
SFIO, based on its investigations, also claimed that Sivasankaran controls the Siva group and took all the important decisions on part of the group companies. It is established beyond doubt that all the commercial transactions entered into with the IL&FS group of entities especially with IFIN were discussed and decided by Sivasankaran with the help of Hari Sankaran (vice chairman IL&FS group) and Parthasarthy, SFIO claimed in the chargesheet.
IFIN is registered as a systematically important non-deposit taking non-banking finance company (NBFC-ND-SI) with the Reserve Bank of India. More than 90% of its income was derived from fund based business, mostly lending. Its other businesses included debt syndication, corporate advisory and investment banking.
SFIO said that its investigation revealed that Sivasankaran had close relationship with Parthasarthy and Sankaran and that IFIN management abused their position by providing loans to Siva group of companies, despite the fact that some of the group companies had failed to repay their earlier loans to IFIN.
It is revealed that Parthasarthy and Sankaran took hospitality from Sivasankaran and used IL&FS group as their personal fiefdom to provide these wrongful gains to Sivasankaran illegally and by violating all the norms and policies of RBI and the company itself, SFIO has alleged.