Former managing director (MD) and chief executive officer (CEO) of Infrastructure Leasing & Financial Services (IL&FS) and its group companies, Ramesh Bawa, had potential direct interest in companies, which were lent loans by the group, an audit by Grant Thornton showed.
The audit is part of the fifth progress report on the resolution of IL&FS and its group companies, submitted by the Ministry of Corporate Affairs (MCA) to the National Company Law Tribunal (NCLT).
Though the Companies Act requires all directors to disclose their concern or interest in any company, which may present a potential conflict of interest, it was not done by Bawa, the report said.
The Grant Thornton said Bawa had potential link with two real estate companies - the Silverglades group and the Ansal group at various points during his tenure as the MD of IL&FS Financial Services (IFIN). It was during his tenure at the top that IFIN extended loans to companies in which Bawa, his wife, and daughter had significant holdings, which at times extended to 100 per cent.
Bawa had 1 per cent shareholding in AAA Infosystem Private Limited between Financial Year (FY) 2015 and 2017, whereas he held the same interest as a shareholder in AAAB Infrastructure Private Limited between FY17 and FY18. Asha Kiran, and Aakansha Bawa, his wife and daughter, respectively, held the rest of 99 per cent in these two companies.
Both companies had been extended loans of up to Rs 120 crore through other subsidiaries of AAA Infosystem and AAAB Infrastructure namely Midway Apartment and Style Estate - allegedly a step-down subsidiary of Silverglades group. The IL&FS group companies also extended loans multiple times to these companies to develop a golf city on a land worth nearly Rs 120 crore.
During his tenure as the MD, IFIN had also extended a loan of nearly Rs 150 crore to Ansal Properties and Infrastructure Limited of which Rs 115 crore had not been paid as of September 30, 2018.
On April 13, Bawa was arrested by the Serious Fraud Investigation Office in the IL&FS defaults case.