SFIO begins probe into irregularities at debt-laden IL&FS in Mumbai

The Serious Fraud Investigation Office (SFIO) has initiated a probe into alleged “financial irregularities” at debt-laden Infrastructure Leasing & Financial Services (IL&FS). 

The SFIO swung into action and began searching IL&FS’ Mumbai office on Monday. Sources said the SFIO team reached the office premises of IL&FS soon after the National Company Law Tribunal issued the order of superseding the company’s board.

An investigating officer with the SFIO said the probe agency was examining the books of the company to find potential discrepancies. The fraud office has seized relevant documents and evidence related to the company’s books.

Subsequently, the SFIO also collected documents and media, including computers, from IL&FS employees. The investigators asked employees to furnish details related to job profile, seating arrangement, etc. 

This was done for a detailed examination of activities of the group and its entities, said a source cited earlier. 

Sources said the SFIO would also examine the role of senior executives and some board members for not raising the red flag on a liquidity crunch. A source said an SFIO team would soon reach the office premises of the connected/associated entities in other cities later this week. 

The fraud office may also question rating agencies for not being more vigilant and accountable. The SFIO will likely consult other investigating agencies and may engage them to widen the probe.

Sources said the Ministry of Corporate Affairs had briefed the SFIO on the rationale behind the removal of the IL&FS board last week and accordingly asked it to take stern action. Meanwhile, the fraud office is also going through the Registrar of Companies’ preliminary report in the matter.