ED goes tough on economic offenders including Vijay Mallya, Nirav Modi and Mehul Choksi; initiates process to confiscate assets

NewsBharati    25-Apr-2018
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New Delhi, April 25: Days after Fugitive Economic Offenders Ordinance 2018 was approved, the Enforcement Directorate (ED) has initiated the process to confiscate properties of liquor baron Vijay Mallya, diamond merchant Nirav Modi and his uncle Mehul Choksi in different bank fraud cases.

 

According to the sources, the Enforcement Directorate has decided to approach the Prevention of Money Laundering Act (PMLA) court in a bid to seek that Mallya, Modi and Choksi be declared fugitives who had dis-regarded non-bailable arrest warrants repeatedly. However, the central probe agency will also argue that these three fraudulent are liable to be covered under the provisions of Fugitive Economic Offenders Ordinance 2018.

Notably, if the ED gets permission from the PMLA court then Vijay Mallya, Nirav Modi and Mehul Choksi will be dispossessed of their properties and assets which will then be vested with the central government. The agency has identified assets worth over 12,000 crore rupees belonging to a few economic offenders including Vijay Mallya, Nirav Modi and Mehul Choksi who have fled the country and which can be confiscated.

Vijay Mallya’s Fraud:

The 61-year old liquor baron Vijay Mallya laundered over Rs 1,300 crore through 13 shell companies in US, Ireland, Mauritius and France. After which the Enforcement Directorate registered a criminal case in this deal last year under the Prevention of Money Laundering Act (PMLA) and have attached assets worth over Rs 9,600 crore till now. The Mumbai’s PMLA Court declared Vijay Mallya ‘fugitive’ after he skipped appearance. Indian authorities are now trying Mallya’s extradition from London.

Nirav Modi and Mehul Choksi fraud:

The biggest fraudulent case hit the country in the month of February where Punjab National Bank reported that it has detected fraudulent and unauthorized transactions in one of its branches in Mumbai. The cumulative fraud amounts stand to Rs 13000 crores and it involved diamond merchant Nirav Modi and his uncle Mehul Choksi.

After the scam was unveiled, the Enforcement Directorate registered an FIR under the Prevention of Money Laundering Act and conducted raids after the surfacing of the alleged fraud by billionaire diamond trader Nirav Modi and his firms.

However, ED reached out to 13 countries to obtain information of the businesses and assets owned by diamond merchant Nirav Modi and his uncle Mehul Choksi. Nirav Modi and his brother Nishal Modi left the country on 1st of January this year. Nirav Modi's wife, an American citizen, left India on 6 January while Mehul Choksi left the country on 4 January. CBI received a complaint from PNB on 29th Jan 2018 and registered the case on 31st January.

Fugitive Economic Offenders Ordinance 2018:

In a bid to punish the fraudulent who cheat banks and escape from the country, the central government on Saturday last week approved Fugitive Economic Offenders Ordinance 2018 that provides for confiscating properties and assets of economic offenders.

Salient features of the Law:

  • Application before the Special Court for a declaration that an individual is a fugitive economic offender;
  • Attachment of the property of a fugitive economic offender;
  • Issue of a notice by the Special Court to the individual alleged to be a fugitive economic offender;
  • Confiscation of the property of an individual declared as a fugitive economic offender resulting from the proceeds of crime;
  • Confiscation of other property belonging to such offender in India and abroad, including benami property;
  • Disentitlement of the fugitive economic offender from defending any civil claim; and
  • An Administrator will be appointed to manage and dispose of the confiscated property under the Act.