IL&FS crisis: ED arrests ITNL MD Arun K Saha, CEO K Ramchand

The crisis at IL&FS came to light last year after some group companies defaulted on debt repayments.

The Enforcement Directorate arrested IL&FS Transportation Networks Limited (ITNL) Managing Director K Ramchand and joint MD-CEO  Arun K Saha on Wednesday.

The Serious Fraud Investigation Office (SFIO) has already arrested the company's former Vice-Chairman Hari Sankaran and former CEO Ramesh Bawa. Both have been lodging in jail since their arrest in April this year.

The crisis at IL&FS, which is estimated to have a debt burden of over Rs 94,000 crore, came to light last year after some group companies defaulted on debt repayments.

The SFIO unearthed a nexus between auditors and former independent directors of IFIN (IL&FS Financial Services Ltd) in defrauding the company. 

IFIN and several other IL&FS group companies also indulged in several illegal circuitous transactions, including fast loan disbursals despite their bad track record.

However, IFIN and other IL&FS entities continued to enjoy high ratings from various rating agencies, including due to window-dressing of the company's books.