Mumbai

One day after former IL&FS bosses get bail, HC puts a stay

The Bombay High Court on Saturday stayed the temporary bail granted to Hari Sankaran (58), former vice-chairman, and Ramesh Bawa (66), former managing director and chief executive officer of Infrastructure Leasing and Financial Services (IL&FS) Financial Services Ltd (IFIN), and said this does not fall under the very urgent matter.

Special Prosecutor Hitene Venegavkar representing the Serious Fraud Investigation Office (SFIO) moved a single bench of Justice A.K. Menon through video conferencing seeking cancellation of bail as the duo are charged with offences under the Companies Act that attract a punishment that can extend up to 10 years. He said as per the high power committee’s decision, set up in the wake of the novel coronavirus pandemic to look into decongesting jails, only those facing charges which attract less than seven years punishment could be granted bail. He also added this does not come under the category of very urgent matter as listed by the chief justice of HC.

Justice Menon agreed to the same and stayed the bail. On Friday, a lockdown/holiday court at the City Civil and Sessions Court granted bail to Mr. Sankaran and Mr. Bawa by stating, “on perusal of document on record, it appears that the applicants are suffering from various diseases and old age. Considering the prevailing situations of COVID 19 in the country and the stage of investigation, temporary bail is allowed.”

They were arrested by SFIO in April 2019 in connection with IL&FS case for alleged irregularities and Judge P.R. Sitre perused their medical record and granted them bail for 75 days on a personal bond of ₹30,000. The court also asked them to surrender once the bail term was over and asked them to deposit their passport with the investigating officer.

SFIO, following their arrest, had claimed that IFIN extended loans to external parties, many of which had already begun defaulting. This included loans given to Siva Group, apart from those given to its own group of companies. The agency claimed that the top management knew of the probable stress because of the loan defaults. The IFIN management adopted “fraudulent practices” to not let these loans or credit facilities be classified as non-performing assets, violating many guidelines set by the central bank, SFIO stated in the complaint.

IFIN also resorted to fresh lending to various group companies, either directly or through another group companies to repay the earlier loans and prevent defaults, SFIO claimed.

According to the agency, none of these companies, which were used for onward landing, had started operations and did not have any upcoming projects.

SFIO further stated that IFIN’s lending to its group companies increased significantly from the financial year 2012-13 and more than doubled to around ₹5,200 crore — 37% of the total loan and advances in 2017-2018.

This article is closed for comments.
Please Email the Editor

Printable version | Nov 30, 2020 7:15:06 AM | https://www.thehindu.com/news/cities/mumbai/one-day-after-former-ilfs-bosses-get-bail-hc-puts-a-stay/article31260465.ece

Next Story