SFIO to investigate IL&FS' financial arm in intra-group dealings, says report

Amid the IL&FS crisis, the Serious Fraud Investigation Office (SFIO) is investigating if there was any unethical practice involved in allowing IL&FS Financial Services (IFIN) to make major investments in group companies or it was a violation of rules that the Reserve Bank of India (RBI) was supposed to implement, The Times of India (TOI) reported, citing sources.

The investigating department as well as the government is looking at both the aspects of the debt-laden company, whose board was recently superseded by a new set of directors led by Uday Kotak, the report said, quoting sources.

In a report to the National Company Law Tribunal (NCLT), the new board has found that there were significant intra-group borrowings, indicating that the group functioned as a single entity with no boundaries of legal entities and separate management, according to sources, said the TOI report. IFIN, a wholly-owned subsidiary of IL&FS is under the supervision of RBI.