New Delhi: The long-running fraudulent activities at crisis-ridden IL&FS could have come to light much earlier in 2017, but for a cover-up job done by the top management in connivance with the independent directors on a whistleblower complaint, an SFIO investigation has revealed.The detailed probe by the Serious Fraud Investigation Office (SFIO) into the affairs of IL&S Financial Services Ltd (IFIN) has revealed a plethora of lapses, violations, ever-greening of loans, deliberate delay in recoveries and even a whistleblower complaint brushed aside by the then management in 2017. Also Read – Dussehra with a ‘green’ twistAs a multi-pronged strategy continues for the revival of the ailing group and to bring to book the perpetrators of the fraud, the earlier audit committee of IFIN has been found at fault on multiple occasions. Analysis of e-mails as also information collected from personnel and other sources have revealed that a whistleblower complaint was received in early 2017, according to officials. However, the audit committee, which is required to have an oversight on the vigil mechanism at the company, failed to act properly with respect to the complaint. Also Read – India receives its first Rafale fighter jet from FranceCiting the SFIO investigation report, which is part of a charge sheet filed by the government’s white-collar investigation agency in this case, officials said the IFIN management was aware of the whistleblower complaint that was received in March 2017 but the audit committee discussed it only in December 2017. Further, the investigation found that the audit committee simply went by the management version and did not inquire into the allegations made in the whistleblower complaint. The scam at IL&FS came to light last year after several group entities defaulted on repayments due to severe liquidity problems. Later, the government superseded the board of directors, which is now working on ways to revive the ailing group. IFIN, which has been found to be funding its own revenues for several years, was the main source of funds for the IL&FS group entities. The group had accumulated a debt burden of more than Rs 90,000 crore. The company converted the funds of banks and public as profit with fraudulent lending activities, while the profits were also utilised for payment of managerial remuneration and dividend to the holding company. The officials noted that the audit committee did not raise any red flag even when there were instances of “disbursal and bullet recovery of loans” on the same day or within a few days. IFIN’s lending to group companies jumped to around Rs 5,200 crore, which was 37 per cent of the company’s total loans and advances in 2017-18 fiscal. The probe also found that IFIN’s audit committee overlooked numerous impairment indicators and actively connived with the management to present a good picture of the company’s financials to prospective investors. According to the findings, incorrect half-yearly financial statements were of great significance as they were being used by the rating agencies for new as well as surveillance ratings. These statements were also used for market borrowings. The SFIO has filed its first charge sheet after inspecting accounts of nearly 400 entities.