Mumbai: The Enforcement Directorate (ED) on Wednesday moved a special PMLA court here seeking to declare diamond traders Nirav Modi and Mehul Choksi as ‘fugitive economic offenders’ and to confiscate their assets worth Rs 3,500 crore in the USD 2 billion PNB fraud case, officials said.
They said two separate applications, under the recently promulgated Fugitive Economic Offenders Ordinance, were filed against the duo before the court that hears matters under the Prevention of Money Laundering Act (PMLA).
The agency had early this month moved a similar application against businessman Vijay Mallya in the Rs 9,000-crore alleged bank loan fraud case and the court recently issued summons to him for August 27 under the new ordinance.
The fresh application seeks to immediately confiscate assets worth about Rs 3,500 crore of Nirav Modi and Choksi and their companies.
The agency seeks to confiscate assets, both movable and immovable, including those located in the United Kingdom and the UAE.
The move has been made on the basis of the two PMLA charge sheets filed by the agency against the two designer diamond jewellers on charges of alleged money laundering.
“Investigations have revealed that Nirav Modi and Mehul Choksi have committed the offence of cheating against Punjab National Bank (PNB) in connivance with certain bank officials by fraudulently getting the LOUs/FLCs issued without following prescribed procedure and caused a wrongful loss to the bank. They have further siphoned off the proceeds of crime so generated through layering through multiple dummy, related, connected entities in India and abroad,” the agency said in its application.
Nirav Modi and his uncle Choksi are being investigated by the ED and the CBI after it was detected that they allegedly cheated Punjab National Bank of more than Rs 13,400 crore with the purported involvement of a few of its employees.
The scam, which reportedly began in 2011, was detected in January this year, after which PNB officials reported it to the probe agencies.
Two criminal complaints were filed by the ED in these instances after taking cognisance of CBI FIRs.
Non-bailable warrants have already been issued against the two while an Interpol ‘red corner’ arrest warrant has been issued against Modi on the request of the ED.
The agency had conducted 260 searches in this case across the country.
The Fugitive Economic Offenders Bill, 2018 was introduced in Lok Sabha on March 12.
The Union cabinet approved the ordinance on April 21.
President Ram Nath Kovind gave his assent to promulgate it a day later.
“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 had said.
Cases of frauds, cheque dishonour or loan default of over Rs 100 crore would come under the ambit of this ordinance.
The government has said the ordinance offers 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.