“They were involved in sanctioning and disbursement of loan without taking proper security to the group companies, which were already in financial distress and unable to pay earlier loans,” the ED said.
Further, they were involved in indirectly routing funds from IFIN to ITNL through the third party, which was the contractor of ITNL — a flagrant violation of RBI norms.
The ED said both of them were not cooperating and were evasive while responding on the issues. Both the officials, being part of the top management earlier as well as being influential people, may try to influence witnesses and destroy evidence. Therefore, they were arrested under Section 19 of the PMLA Act, it noted.
The enforcement agency examining the books of IFIN and other subsidiaries found significant transactions between group firms such IL&FS Rail and Transportation Networks. It was also observed that groups firms had done so deliberately, with an intent to siphon off the loan amount.