Ramesh Bawa, former IL&FS MD and CEO, arrested in Delhi

Former IL&FS managing director and Chief Executive Officer Ramesh Bawa has been arrested by the Serious Fraud Investigation Office in Delhi after the Supreme Court had refused to extend his protection from being apprehended.

As per sources, Bawa was arrested late on last night and its the second arrest made by the authorities of the Ministry of Corporate Affairs (MCA).

Bawa has been arrested under the companies act of Section 447 which states that the administration can arrest a person if he/she commits fraud. Earlier, the former vice chairman of IL&FS, Hari Sankaran was also arrested under the similar charges of Section 447 under the Companies Act.

A government official, after the arrest of Hari Sankaran had said, “Hari Sankaran has been arrested on the grounds of abusing his powers in IL&FS Financial Services through his fraudulent conduct and in granting loans to entities which were not creditworthy or have been declared Non-Performing Assets and caused wrongful loss to the company and its creditors.”

An infrastructure financing and construction company, IL&FS has been facing crisis since a long period of time as there debt has now risen to Rs 91,000 crore and the company has been continuously trying to sell out its shares and assets to payback the dues. LIC was roped in to follow up the damage control but after some objections and failed deal, it was canceled.

LIC had then took over the controlling share of IDBI bank which also went under debt and was on the verge of getting bankrupt.