IL&FS scam: ED questions NCP state chief for over 9 hours

Mumbai: The Enforcement Directorate (ED) on Monday questioned senior Nationalist Congress Party (NCP) state chief and former Maharashtra minister Jayant Patil for over nine hours to record his statement as part of its money-laundering probe related to alleged financial irregularities at the debt-hit Infrastructure Leasing and Financial Services (IL&FS).

“No payment came in my account, nor any payment went to anyone from my account. These are false allegations. I have replied to all the questions of ED to their satisfaction. I was not asked about any payment from any sub - contractor. I have no links with IL & FS at all, “ Patil later told media.

The ED questioned Patil to verify allegations that he was a beneficiary, via his aide/s, of some proceeds of crime in the case, claimed ED sources.

The agency recently recorded the statement of a suspect in the case, who alleged that there was a transaction related to proceeds of crime, an ED source claimed. Patil however denied all allegations related to bribery/ wrongdoing against him during the questioning, agency sources said.

The agency is investigating allegations that a subcontractor of the IL&FS had made payments, via cash and bank transactions, to certain individual/s, who is/are suspected to be aide/s of Patil, ED sources claimed.

The agency suspects that the indirect payment was made at a time Patil was a public servant. The agency has already questioned the individuals who were allegedly party to the transactions and also carried out searches as part of its verifications. The subcontractor at the time of the alleged incident was connected to an infrastructure project pertaining to road construction, the source claimed.

Patil on Monday arrived at the ED office at around 12.10 pm, on foot from the adjacent NCP office located at Ballard Estate. There was a deployment of a 300-strong police contingent, drawn from the local MRA police, the Riot Control police, the city police’s Striking Force and the State Reserve Police Force, in the area since 9 am on Monday. This was to ensure that there was no untoward incident in view of the 1,000-strong contingent of NCP workers, who came there from all over the state, including Mumbai and Patil ‘s home district Sangli.

The workers, amid the police deployment and barricades, expressed their support and encouragement for Patil during their day long vigil. They chanted slogans like, “ED Sarkar, hai hai (Down with ED government)” and “Down with dictatorship” periodically and most of them had put on white caps with a customised message, Majha neta Jayant Patil (Jayant Patil is our leader).

An NCP worker from Sangli, Tanaji Kharade, told HT that Patil is a politician with a clean record of public service who doesn’t have even one stain of corruption.

“He is a seven-term MLA but stays in an over 50-year-old house of four rooms in Sangli. He is humble, meets the public and party workers and works for them. It is a political conspiracy to humiliate and taint him,” Tanaji claimed.

The agency had earlier called Patil on May 12, but he had not appeared claiming he had personal work. Patil, 61, a former minister of home and finance, is also the state president of the NCP and is a seven-term legislator from Sangli’s Islampur.

Earlier this month, the ED had also conducted searches in Mumbai at five locations against two former IL&FS audit firms, BSR and Associates and Deloitte Haskins and Sells. ED has taken under its scanner the books of accounts and financial statements from 2013-14 to 2017-18.

The ED is verifying whether suspects under the probe’s scanner were aware of any dubious and illegal practice/s adopted by key managerial personnel of IFIN and if the same was reported to relevant authorities, sources said.

The ED sources claimed that they were verifying if some of the documents recovered during the searches were linked to Patil.

The agency’s action against the former IL&FS auditors had come after the Supreme Court recently set aside the Bombay high court verdict that had quashed the SFIO (Serious Fraud Investigation Office) probe against the two audit firms over alleged financial irregularities. The SFIO is under the Ministry of Corporate Affairs and probes and prosecutes financial crimes.

The ED’s probe in the IL&FS case had been initiated in February 2019 based on a Delhi Police Economic Offences Wing (EOW) case filed against IRL, ITNL (group companies of IL&FS), its officials and others. ED had also taken the cognisance of a complaint filed by the SFIO against IL&FS Financial Services (IFIN) and its officials.

The agency alleged in the chargesheet that the senior management of IL&FS indulged in acts of commissions and omissions, leading to illegal personal gains to them at the expense of the company.

It had said in order to maintain the credentials of IFIN —so that they could continue to receive high remuneration — the directors allegedly falsified the accounts and indulged in “circuitous transactions” to artificially boost the balance sheet of the IL&FS group, whereas in reality, these illegal activities were leading to further losses to the group. The chargesheet had also accused that funds were also taken out from the IL&FS Employee Welfare Trust.

According to records, the IL&FS group companies had an aggregate debt burden of more than ₹91,000 crore and a series of defaults had taken place between June and September in 2018. This led to the initiation of action against the firms and their auditors. The Union government took over management control of IL&FS and appointed a new board in October 2018 in an effort to control the defaults.

It is not the first time the agency has summoned a senior state politician in the probe. In August 2019, the agency had questioned Maharashtra Navnirman Sena chief Raj Thackeray and recorded his statement as part of the probe related to alleged irregularities with IL&FS’s loans and equity investment worth ₹860 crore in a firm, Kohinoor CTNL Infrastructure Co Private Limited. Thackeray had denied any wrongdoing or a role in suspicious transactions linked with the firm.