The company was then sent to the National Company Law Tribunal for debt resolution and the government appointed a board to steer the group out of financial trouble.
In a statement, the Chennai police said Parthasarthy was produced before a court on Friday and was sent to police custody for 15 days.
“The kingpin and the mastermind of the Rs 1 lakh crore IL&FS scam, Ravi Parthasarathy, has been arrested by the EOW (economic offences wing) in connection with Crime No.13 of 2020 dated 20 September 2020. The IL&FS group, which consists of more than 350 group companies, was used as a vehicle to perpetrate fraud by the then management of IL&FS group, which was headed by the then chairman and MD & CEO, Ravi Parthasarathy,” the Chennai police EOW said in a statement.
63 moons had alleged IL&FS Transportation Networks India Ltd (ITNL) failed to repay its dues despite promising investors to return the money (Rs 200 crore). It then filed a complaint with the police in 2020. The EOW had earlier arrested former managing director Ramchand Karunakaran and the former vice-chairman of IL&FS and director of ITNL, Hari Sankaran, in January this year.
Parthasarathy became chief executive officer of IL&FS when it was set up in 1989 and chairman in 2006. He retired in July 2018, just before the IL&FS scam made headlines.
An alumnus of IIM Ahmedabad, the former Citibanker, who was also co-founder of 20th Century Finance, was in the news when IL&FS took over Maytas Infrastructure in 2009.
In 2008, he sold a stake in IL&FS Investmart, the broking subsidiary, for $260 million to HSBC. But IL&FS, under his leadership, turned into an opaque and complex organisation despite having listed entities.
Just before the IL&FS scam broke, Parthasarthy travelled to London on health grounds and stayed there till things quieted down. Even as the senior management staff of IL&FS, including Sankaran, were incarcerated, Parthasarathy remained out of jail.
He moved the Madras High Court for anticipatory bail in the 63 moons matter. The petition was, however, rejected and Parthasarathy was arrested on Wednesday in Mumbai and taken to Chennai for questioning.
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