IL&FS case: Mumbai court accepts SFIO charge sheet against 30 individuals, including company top brass, auditors

The Mumbai Sessions Court accepted the charge sheet filed by Serious Fraud Investigation Office (SFIO) in the IL& FS case on Friday. The agency filed the charge sheet last week on Thursday against 30 individuals, including some former top management officials of Infrastructure Leasing and Financial Services (IL&FS), IL&FS Financial Services (IFIN), as well as auditors from Deloitte, BSR and Co, and some independent auditors. The charge sheet also mentioned the name of C Sivashankaran, a businessman who allegedly offered several favours to the top management in lieu of loans that led to huge losses to the company.

The charge sheet also brought to light the inspection report by Reserve Bank of India (RBI) for financial year 2016-17 which had revealed that debentures of Rs 190 crore purchased by the IL&FS group were used to fund earlier loans given by the company to different companies belonging to Sivashankaran's Siva group.

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The charge sheet also remarked that IL&FS kept functioning despite the RBI inspection. SFIO also noted that the crisis could have been prevented if the central bank had acted.

When asked about observations in the SFIO charge sheet, RBI Governor Shaktikant Das said the central bank hasn't been officially informed about such remarks by the agency. But he did assure that the RBI is monitoring major non-bank lenders and housing finance companies and it will take necessary steps to maintain financial stability.

The SFIO charge sheet also came down hard on the auditors of IL&FS group. It accused the auditors of concealing material information and falsifying the books of accounts. The document also said that the independent directors of the company, rather than acting, remained mute spectators despite being aware of the RBI reports.

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The charge sheet pointed out five deferent charges against the individuals and entities mentioned in it. These include committing fraud under Section 447 and 68 of Companies Act 2013, failure of discharging duties of statutory auditors under Section 143 of the Act, and for not giving true and fair view of affairs in balance sheet. The charge sheet accused the Director of IFIN of not disclosing his interests.