Former Finance Minister P Chidambaram’s known associate in financial frauds and former IL&FS (Infrastructure Leasing & Financial Services) Chairman Ravi Parthasarathy is at last arrested by Chennai Police’s Economic Offences Wing (EOW) on Friday and sent to 15 days in jail for cheating and criminal breach. Ravi Parthasarathy who was ruling the roost during Chidambaram’s tenure as Finance Minister is caught with an Rs.200 crore cheating and criminal breach of trust case filed by 63 moons technologies ltd. Now Parthasarathy has been sent to 15 days of judicial custody and is lodged at Saidapet police jail.
“The kingpin and the mastermind of the Rs.1 lakh crore IL&FS scam Ravi Parthasarathy has been arrested by EOW in connection with Crime No.13 of 2020 dated 20 September 2020. The IL&FS group, which consists of more than 350 group companies was used as a vehicle to perpetrate fraud by then management of IL&FS group, which was headed by the then chairman and MD CEO Mr Parthasarathy,” said the Chennai EOW in a statement on Friday evening.
The Government of India in its petition had mentioned, “Ravi Parthasarathy and his team were responsible for the negligence, incompetency and misleading the public by presenting rosy financial statements.
Chidambaram’s money swindler Parthasarathy was arrested from Mumbai on June 9 and brought to Chennai. Madras High Court had dismissed the anticipatory bail petition filed by Parthasarathy. The case is probed by a special team under the supervision of R Dinakaran, Inspector General of Police (IGP) with the support of the deputy superintendent of Police Prakash Babu.
In its complaint, 63 moons had alleged offences of cheating and criminal breach of trust in the repayment of Rs.200 crore invested by the company in debentures of IL&FS Transportation Networks India Ltd (ITNL). During 2014 and 2015, ITNL had notified issuance of 1,000 and 2,000 non-convertible debentures with a face value of Rs.10 lakh each, aggregating to Rs.100 crore and Rs.250 crore respectively, on a private placement basis[1].
Earlier in January, the EOW had arrested Ramchand Karunakaran, former managing director, and Hari Sankaran, former vice-chairman, and director of ITNL from Mumbai. Based on the complaint filed by 63 moons, the Chennai EOW had registered a first information report (FIR). The EOW says, it has been receiving complaints from other depositors of ITNL. It has also asked aggrieved depositors and investors of ITNL to forward their claims to the Chennai EOW.
Earlier, the Government of India in its petition had mentioned, “Ravi Parthasarathy and his team were responsible for the negligence, incompetency and misleading the public by presenting rosy financial statements. IL&FS was camouflaging its financial statements by hiding a severe mismatch between its cash flows and payment obligations. It was also hiding total lack of liquidity and glaring adverse financial ratios.”
Parthasarathy, who was at the helm of IL&FS for over 25 years, is accused of masterminding one of the largest financial frauds and systematically driving a behemoth of a financial institution into financial ruin.
In addition to the premier investigating agency, the Serious Fraud Investigation Office (SFIO), the Reserve Bank of India (RBI), the Ministry of Corporate Affairs (Union of India), the Registrar of Companies (RoC), the National Company Law Tribunal (NCLT), Mumbai, along with the Grant Thornton forensic report have made adverse findings against him.
The RoC has observed mismanagement and compromise in corporate governance norms, while there is another FIR registered by the EOW-New Delhi against Parthasarathy and Hari Sankaran under various sections of IPC.
In one of the most damaging findings, the GoI petition mentioned, “IL&FS had created a trust known as the Employee Welfare Trust which was used as an instrument to enrich its directors at the cost of the Company. The said trust was used to perpetrate a fraud on IL&FS and its group companies. The trust owned 12 per cent of IL&FS Limited. Ravi Parthasarathy and certain other senior IL&FS personnel were major beneficiaries of the Trust.”
The RBI report, which it submitted on March 22, 2019, underlined that the major role in perpetuating the fraud and financial irregularity was played by Parthasarathy during his tenure as the Group Chairman[2].
The forensic audit by Grant Thornton also revealed a bevy of illegal practices, bribing of credit rating agencies, and other fraudulent practices, indicating clearly the involvement of the then IL&FS Group Chairman Parthasarathy.
References:
[1] Chennai EOW Arrests Ravi Parthasarathy of IL&FS in Rs200 crore Cheating Case Filed by 63 moons – Jun 11, 2021, Money Life
[2] IL&FS Chairman Ravi Parthasarathy arrested in ‘Rs 1 lakh crore scam’ – Jun 11, 2021, Zee News
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[…] Ravi Ramaswami Parthasarathy, the close confidant of former finance minister P Chidambaram, has finally been ensnared by the long arm of law. With the arrest of Ravi Parthasarathy the kingpin of Rs.1 lakh crore Infrastructure Leasing and Finance Limited (IL&FS) scam by the Chennai Economic Offense Wing (EOW), the writing on the wall is clear – No One is Above the Law. Chennai EOW has set a benchmark[1]. […]