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department as well as the government is looking at both the aspects of the debt-laden company, whose board was recently superseded by a new set of directors led by Uday Kotak, the report said, quoting sources.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.
The report said that the IFIN’s exposure to group companies was estimated to be at about Rs 5,500 crore, while it should have been less than Rs 673 crore.
