Chennai: First Leasing Company of India Limited (FLCIL)’s former vice president & CFO, S. Dilliraj, and former CFO, L. Sivaramakrishnan, were arrested on Monday by the Enforcement Directorate, Chennai region, on charges of defrauding two banks to the tune of over Rs 500 crore.
Sources said the duo was booked under the provisions of Prevention of Money Laundering Act 2002, and were produced before a court, which remanded them to judicial custody until August 11.
It is learnt Dilliraj, who was associated with the institution, was involved in negotiating with banks besides donning the role of CFO until 2007. Sivaramakrishnan became the CFO in 2007 and was in charge of all financial operations.
Based on the complaint by IDBI Bank and SBI, the Central Bureau of Investigation — Banking Securities and Fraud Cell (CBI-BS&FC) registered cases against FLCIL and its key personnel alleging fraud amounting to over Rs 500 crore. Accordingly, a money laundering case was registered by the Directorate of Enforcement, Chennai Zonal Office, Chennai against FLCIL.
Pursuing the money laundering case, ED had arrested Farouk M. Irani, former MD of the company, on June 14 and his property worth Rs 51 crores was attached provisionally.
Subsequently, searches were conducted at the residential premises of Dilliraj at Hyderabad and Sivaramakrishanan in Chennai and certain property documents were recovered.
Dilliraj and Sivaramakrishnan admitted to their crucial role in fudging the accounts of FLCIL in order to obtain higher loans from the banks. In the process, they were enriched and aided the undue enrichment of other per-
sons like Farouk M. Irani.
The Chennai-based FLCIL is registered un-der the Companies Act 1956 and as a Non-Bank-ing Financial Company registered with RBI. It was incorporated in 1973 and a public issue was made in 1983. Faro-uk M. Irani, and A.C. Muthiah, the promoter of SPIC, jointly promoted the firm.
The company's main revenue segments include hire purchase and finance charge. FLCL was involved in several businesses including leasing and hire-purchase. The company ceased its operation following an order from the RBI in 2013.
