MUMBAI: The Enforcement Directorate (ED) has constrained Shahzaad Siraj Dalal – the person who took IL&FS overseas and led its bold non-public fairness initiative – from promoting his property in South Mumbai’s Babulnath place.
Dalal had resigned from IL&FS and moved to Dubai a few years in the past. He is now in India, in response to a summon from ED which has told Dalal not to leave the USA. The assets in Babulnath’s Aurum Platz, which Dalal can neither sell nor gift nor loan, has come below the purview of investigation performed with the aid of ED underneath the Prevention of Money Laundering Act, 2002.
The price range floated by way of IL&FS Investment Managers, which Dalal headed, had financed several real property builders in India. Dalal’s finances and association with a number of the builders can be looked into in the path of the probe by ED.
Responding to ET’s question, Zulfiqar Memon, handling director of MZM Legal which represents Dalal, stated: “Mr. Dalal has been questioned by means of SFIO (Serious Fraud Investigation Office) and ED, and within the spirit of a truthful and honest research, he has been co-working with them to the great of his capacity. He will retain to achieve this till he isn’t any greater required for research by way of the authorities.”
While ED is investigating on the basis of an FIR filed with the Economic Offences Wing (Delhi), the ministry of corporate affairs had closing September directed SFIO to analyze into the affairs of IL&FS and its subsidiaries.
Among different matters, SFIO officers can also try to find out from Dalal about the circumstances under which loans given through IL&FS Financial Services (IFIN), the non-banking finance arm of IL&FS, and organization entities to IL&FS Employee Welfare Trust (EWT). The transactions and functioning of EWT have come beneath the glare of SFIO.
“Dalal became close to the erstwhile directors in the IL&FS group. He is one of the important men and women within the investigation and is being probed in IFIN subjects,” said an SFIO official.
“One part of the probe pertains to searching into alleged falsification of stability-sheets, spherical-tripping or ever-greening of loans to hide NPAs and preserve on borrowing, and to what extent the auditors have been privy to this whole sport.
The different factor of the probe might be whether senior officers who ran the group diverted money to benefit for my part. That would be proceeds of crime and investigated underneath PMLA,” stated every other man or woman aware of the continued investigations. Two more individuals working with one of the auditors were in Delhi SFIO office on Wednesday for interrogation.
The transactions went on like this: IFIN could lend to a collection employer – say, ITNL – and whilst the latter was unable to pay off the mortgage, IFIN could lend to every other entity, likely out of doors the organization, which might lend to ITNL; ITNL would then use the finances to provide the loan from IFIN. The auditors in their protection have stated that considering that they were no longer auditing the books of all groups within the transaction chain, they cannot be held responsible for ever-greening of loans. “This is precisely why SFIO has amassed all emails and inner correspondence from auditors to parent out whether or not they knew whatever approximately this,” stated the individual.
The IL&FS EWT offered shares issued with the aid of IL&FS companies with loans acquired from some of the group businesses like IFIN. Some of these shares have been sold to traders along with LIC and Orix at a top rate and the profits have been dispensed among all employees – but disproportionately in favour of top officials.
Some of the amendments to EWT and the manner these have been accomplished have drawn the SFIO’s attention. One of the amendments become done without the approval of IL&FS, the settlor of the consider and the participants of the committee of administrators of IL&FS were also trustees of EWT at that point, main to a struggle of hobby.
In March 2011, the board of trustees turned into reconstituted and top institution officers like Vibhav Kapoor, Ram Chand, and RC Bawa had been made everlasting trustees up to March 2016.
However, they persisted to behave as trustees till October 2018. “EWT changed into a discretionary accept as true with, so it had certain liberties. But there had been clear conflicts of interest,” stated a supply.