Mr Bawa had resigned from his position in September 2018 after a series of defaults by IL&FS which sent tremors in financial markets.
Former IL&FS Financial Services CEO Ramesh Bawa was arrested by the Serious Fraud Investigation Office (SFIO) on Friday, after the Supreme Court refused to grant him protection from apprehension. The matter relates to a series of defaults by Infrastructure Financing and Leasing Services (IL&FS) on its debt obligations last year, underlining the broader concerns about the financial health of the country’s non-banking financial service sector. Bawa had resigned as Chief Executive Officer and Managing Director of IL&FS Financial Services in September last year.
Bawa was held under Section 447 of the Companies Act that enables the investigating arm of the Ministry of Corporate Affairs to make an arrest for committing fraud. His arrest comes two weeks after the arrest of former IL&FS chairman Hari Sankaran for fraud.
IL&FS is reeling under debts to the tune of Rs. 91,000 crore. The government took control of the heavily indebted infrastructure financing and construction group in October last year.
The alleged financial irregularities at IL&FS came to light after some group entities defaulted on debt repayments.
The Enforcement Directorate is also probing the alleged irregularities. In February, It had registered a case of money laundering against ILFS Rail, ILF Transportation Networks, Ravi Parthasarathy, Hari Sankaran and Ramesh Bawa.