ED looks to confiscate Rs15,000-cr assets of `fugitives' Mallya and Nirav Mody
25 April 2018
Armed with the new `Fugitive Economic Offenders Ordinance’, the Enforcement Directorate (ED) is looking at “confiscating” assets worth over Rs15,000 crore belonging to liquor baron Vijay Mallya and diamantaire Nirav Modi.
The ED has so far attached assets worth Rs9,890 crore in the Mallya case while properties worth Rs7,664 have been attached in the Nirav Modi-Mehul Choksi case.
Nirav Modi and Mehul Choksi are accused of committing a Rs14,000-crore fraud on Punjab National Bank, the biggest bank fraud in the country so far.
Under the Prevention of Money laundering Act (PMLA), the assets could only be confiscated after conclusion of the trial, which usually takes a long time.
The ED is reported to have begun the work of bringing together the existing cases of high-value fugitives and bank loan defaulters and it will soon approach various special anti-money laundering courts in the country to get orders issued against them under the new ordinance.
Reports quoting official sources said the agency has decided to approach the Prevention of Money Laundering Act (PMLA) court to get Vijay Mallya, Nirav Modi and Mehul Choksi declared as fugitives.
All three of them are absconding and have defied non-bailable arrest warrants.
They said the money laundering cases against Vijay Mallya, who is now based in London, Nirav Modi and his uncle Mehul Choski, Winsome Diamond company promoter Jatin Mehta and others are expected to be taken up first.
Under the new ordinance all the assets of such absconders, both in India and abroad, which have or have not been attached by the ED under the Prevention of Money Laundering Act (PMLA), can be confiscated immediately.
“A Fugitive Economic Offender is a person against whom an arrest warrant has been issued in respect of a scheduled offence and who has left India so as to avoid criminal prosecution, or being abroad, refuses to return to India to face criminal prosecution,” according to the government statement.
However, only cases of frauds, cheque dishonour or loan default of over Rs200 crore would come under this ordinance.
The ordinance provides for all necessary constitutional safeguards in terms of providing hearing to the person through counsel, allowing him time to file a reply, serving notice of summons to him, whether in India or abroad and appeal before the high court.
The government expects the new law to help banks and other financial institutions to achieve higher recovery from financial defaults committed by fugitive economic offenders, thereby improving the financial health of these institutions.