The agency, empowered by the Union government to enact the new power in the country, will seek an official declaration to categorise Nirav Modi as a “fugitive” based on its prosecution complaint (charge sheet) filed before a special court in Mumbai last week under the Prevention of Money Laundering Act (PMLA).
On May 24, the ED had filed its first charge sheet in the over USD 2 billion PNB fraud case involving diamantaire Nirav Modi and his associates stating that over Rs 6,400 crore of bank funds were allegedly laundered abroad to dummy companies by him and others.
A total of 24 accused have been listed in the charge sheet, filed under section 45 of the PMLA, including Nirav Modi, his father, brother Neeshal Modi, sister Purvi Modi, brother-in-law Mayank Mehta and the designer jewellers’ firms–Ms Solar Exports, Stellar Diamonds and Diamonds R Us.
The court is expected to take cognisance of the 12,000 page charge sheet tomorrow and the counsel for the agency will subsequently seek its permission to invoke the provisions of the Fugitive Economic Offenders Ordinance against Modi and immediately begin the procedure to confiscate all the assets “of and linked to” Modi in India and abroad, a senior official told media.
A court-issued non-bailable warrant is already pending against Modi and the ED has also moved the Interpol to get a global arrest warrant issued against him, sometime back.
The agency will initiate the same action against absconding liquor baron Vijay Mallya, against whom the Enforcement Directorate and the CBI had filed their respective charge sheets last year.
It is expected, the official said, that assets worth Rs 7,000 crore can be confiscated in the money laundering and the Punjab National Bank fraud corruption case against Nirav Modi, under the stringent fugitive offenders ordinance.
The central probe agency had recently begun the work to bring together the existing cases of high-value fugitives and bank loan defaulters for getting them notified under the new legislation. As per the existing process of law under the PMLA, the ED could only confiscate the assets once the trial in a case finishes which usually takes a long time of many years.
The ordinance is aimed at deterring economic offenders from evading the process of law by remaining outside the jurisdiction of Indian courts.
The Modi government brought the ordinance last month as “there have been instances of economic offenders fleeing the jurisdiction of Indian courts, anticipating the commencement, or during the pendency, of criminal proceedings,” the government said.
The rationale behind the law, the government had said, was the absence of such offenders from Indian courts which hampers investigation and wastes court time and undermines the rule of law.
“The existing civil and criminal provisions in law are not entirely adequate to deal with the severity of the problem,” it had said.
The Fugitive Economic Offenders Bill, 2018 was introduced in the Lok Sabha on March 12 but couldnt be taken up due to logjam in Parliament over different issues.
With Parliament being adjourned sine die, an ordinance was proposed.
The Union Cabinet on April 21 approved the ordinance and the President gave his assent to promulgation of the same a day later.
The ordinance makes provisions for special courts under the Prevention of Money Laundering Act, 2002 to declare a person as a fugitive economic offender.
“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,” the government statement said.
However, only cases of frauds, cheque dishonour or loan default of over Rs 200 crore would come under this ordinance.
The ordinance provides for 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 had said the new law would help banks and other financial institutions to achieve higher recovery from financial defaults committed by fugitive economic offenders, improving the financial health of such institutions.
The ED would take the same action of notification under the fugitive offenders ordinance after filing a second charge sheet against Modi’s uncle and jeweller Mehul Choksi and his businesses, who are also accused in this case.
Nirav Modi, who is absconding and has not joined the ED probe in the case till now, and others are being probed under various criminal laws after the fraud came to light this year following a complaint by the Punjab National Bank that they allegedly cheated the nationalised bank to the tune of over Rs 13,000 crore, with the purported involvement of a few employees of the bank.
Both Nirav Modi and Choksi are said to have left the country before criminal cases were lodged against them.