NEW DEVELOPMENT
The Enforcement Directorate (ED) today arrested DHFL promoters Kapil and Dheeraj Wadhawan in connection with its money laundering probe against Yes Bank co-founder Rana Kapoor and others. The brothers were remanded to 10-day ED custody by a special court in Mumbai. The Wadhawans are presently in jail after being arrested by the Central Bureau of Investigation (CBI), which is also probing the same case. They were arrested under the provisions of the Prevention of Money Laundering Act (PMLA).
As many as 44 companies belonging to 10 large business groups, including Anil Ambani Group, Essel Group, ILFS, Dewan Housing Finance Corporation Ltd, Cox & Kings, and Bharat Infra, reportedly accounted for bad loans of ₹34,000 crores of Yes Bank.
BOMBAY HIGH COURT
The Bombay High Court on Tuesday refused to grant pre-arrest bail to DHFL promoters Dheeraj Wadhawan and Kapil Wadhawan in a money laundering case of Yes Bank being probed by the Enforcement Directorate (ED), noting their custodial interrogation was required to unearth the conspiracy and modus operandi in the multi-crore scam.
The Wadhawans are presently in jail after being earlier arrested by the CBI in a separate case related to the Yes Bank scam.
They had moved the High Court last week seeking anticipatory bail in the money laundering case and another case pertaining to alleged irregularities in the investment of employees’ provident fund of Uttar Pradesh Power Corporation Ltd (UPPCL).
The court, however, refused to accept the excuse of the COVID-19 pandemic and said this shall not deter the ED from investigating a serious offence of money laundering which has shaken the economy of this country.
Accepting this argument, Justice Dangre said, A serious economic offence cannot wait for the pandemic to recede and the projection of the applicants as not being healthy would not absolve them from being subjected to interrogation.”
With regard to the case pertaining to provident funds worth Rs 4,200 crore which were deposited with Dewan Housing Finance Corporation Ltd (DHFL) as fixed deposits in alleged collusion with some officials of UPPCL. The court noted that DHFL had received a huge amount of illegal investment and proceeds generated from the illegal act of UPPCL.
The role played by the applicants (Dheeraj and Kapil Wadhawan) as those in charge of the company (DHFL) cannot be under a cloud and follow up of the money trail is to be established. This warrants investigations which can only be carried out by having custody of the applicants, the court said.
Dheeraj and Kapil Wadhawan were arrested last month by the Central Bureau of Investigation (CBI) in connection with the Yes Bank scam.
According to the CBI FIR, the scam started taking shape between April and June 2018 when Yes Bank invested Rs 3,700 crore in short-term debentures of the scam-hit DHFL. In return, the Wadhawans allegedly “paid kickbacks of Rs 600 crore” to former Yes Bank CEO Rana Kapoor and his family members in the form of loans to DoIT Urban Ventures (India) Pvt Ltd held by the wife and daughters of Kapoor, the CBI has claimed.
ENFORCEMENT DIRECTORATE
The main functions of the Directorate are as to Investigate contraventions of the provisions of Foreign Exchange Management Act, 1999(FEMA). Contraventions of FEMA are dealt with by way of adjudication by designated authorities of ED and penalties up to three times the sum involved can be imposed.
Investigate offences of money laundering under the provisions of Prevention of Money Laundering Act, 2002(PMLA) which came into force with effect from 1.7.2005 and to take actions of attachment and confiscation of property if the same is determined to be proceeds of crime derived from a Scheduled Offence under PMLA, and to prosecute the persons involved in the offence of money laundering. There are 156 offences under 28 statutes which are Scheduled Offences under PMLA.
Processing cases of fugitive/s from India under the Fugitive Economic Offenders Act, 2018. The objective of this Act is to provide for measures to deter fugitive economic offenders from evading the process of law in India by staying outside the jurisdiction of Indian Courts and to preserve the sanctity of the rule of law in India.
Sponsor cases of preventive detention under Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974(COFEPOSA) in regard to contraventions of FEMA.
Render cooperation to foreign countries in matters relating to money laundering and restitution of assets under the provisions of PMLA and to seek cooperation in such matters.
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