All About the IL&FS Case and the Chain of Commissions

After Maharashtra Navnirman Sena (MNS) chief Raj Thackeray, Nationalist Congress Party (NCP) state president Jayant Patil is on the Enforcement Directorate (ED) radar in the Infrastructure Leasing and Financial Services (IL&FS) case. According to sources, names of other politicians, too, are likely to crop up in the case.

While ED officials are tight-lipped, Patil is reportedly under scrutiny in relation to commissions sought as part of money laundering related to IL&FS.

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The investigation dates back to 2008-2014, when then Maharashtra government had assigned contracts worth thousands of crores for infrastructure projects to build roads. IL&FS, too, was assigned such contracts, which it, in turn, assigned to IFIN, from there on to ITNL, a group companies of IL&FS; and through them to different subcontractors which led to the involvement of politicians, said sources. Another source told CNN-News18 that some contractors were favoured during transactions and contracts in lieu for commissions, and this chain of commission led ED to Patil. Sources said some subcontractors allegedly passed the commission amount to people close to Patil.

According to sources, the contractors and subcontractors have already been questioned, following which summons were issued to Patil. “I answered all the questions of Enforcement Directorate officials. I cooperated with them while recording my statement. I never did wrong things in my life,” Patil said after his questioning on Monday.

THE CASE

IL&FS went bankrupt in 2018, following which the ED took cognisance of this case in 2019 on the basis of the first information report (FIR) filed with the Delhi Police’s Economic Offences Wing (EOW). This complaint was against IRL and ITNL.

IL&FS group companies had an aggregate debt burden of more than Rs 91,000 crore and a series of defaults had taken place between June and September in 2018. These defaults had threatened to collapse the money market of India.

A petition was filed in the Bombay High Court seeking quashing of the Serious Fraud Investigation Office (SFIO) probe against two companies led by former auditors of IL&FS. However, it was recently quashed by Supreme Court, which led to action being taken against them under the Companies Act. This would also allow National Company Law Tribunal (NCLT) to enquire against them.

As the order came out, searches were conducted at the Mumbai offices of Deloitte Haskins and Sells and BSR and Associates, an Indian affiliate of global accounting firm KPMG, and the two former auditors of IL&FS.

POLITICAL VENDETTA?

This development comes just few weeks after Patil was seen shedding tears when NCP supremo Sharad Pawar had announced his resignation. In the aftermath of Pawar’s resignation, Patil was seen as one of the top contenders to lead the party.

The visuals outside NCP and ED office, which are just a lane apart, showed the clout that Patil enjoys amid the NCP cadre. Hundreds of workers from several parts of Maharashtra gathered to extend their support to Patil. These visuals were quite similar to when Nawab Mallik, NCP spokesperson, was arrested by ED almost a year ago.

However, NCP workers and leaders have termed the ED summons the “central government’s targeted attacks”.

Reacting to Patil’s questioning, Pawar hinted that the action against some leaders of his party could be the fallout of their refusal to meet “expectations” of the ruling dispensation.

Several NCP leaders such as Hasan Mushrif, Ajit Pawar, Nawab Mallik and Anil Deshmukh, among others, have been under the scanner of the central agency.