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Business News/ Politics / Policy/  Government to strengthen Enforcement Directorate
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Government to strengthen Enforcement Directorate

The bill to strengthen the Enforcement Directorate (ED) aims to bring to task suspected economic offenders who flee India and do not return to face trial

The bill to strengthen the ED gives the govt powers to confiscate property both within and outside India of fugitive economic offenders — whether or not the properties have been purchased from proceeds of crime. Photo: MintPremium
The bill to strengthen the ED gives the govt powers to confiscate property both within and outside India of fugitive economic offenders — whether or not the properties have been purchased from proceeds of crime. Photo: Mint

New Delhi: With growing instances of so-called ‘loot and scoot’ crimes, the Enforcement Directorate (ED) is gaining in stature as an investigation agency.

Initially tasked with enforcing the Prevention of Money Laundering Act (PMLA) and the Foreign Exchange Management Act, the ED has now been given the responsibility of enforcing the Fugitives Economic Offenders bill 2018, as and when it becomes a law.

The bill aims to bring to task suspected economic offenders who flee India and do not return to face trial. It gives the government powers to confiscate property both within and outside India of fugitive economic offenders — whether or not the properties have been purchased from proceeds of crime.

It also covers a wide array of white collar offences that can lead to an individual being classified as an economic offender. Serious violations of tax laws, including the goods and services tax, customs and excise, anti-black money law and benami property transactions could see provisions of this bill kick in. To be sure, the amount involved has to be more than Rs100 crore for the law to kick apply.

The bill was introduced in Lok Sabha earlier this week. It was cleared by the cabinet earlier this month.

At present, the ED has the powers to only confiscate property held in the country if the proceeds of crime have been taken out of the country. To strengthen the ED, the government has also moved amendments to the finance bill to enable it to seize property held outside the country. Further, corporate frauds are also proposed to be included as a schedule offence under PMLA giving ED the powers to probe them.

“The amendment to the PMLA act is not the result of any particular case against any individual or entity. However, if it comes through, it will bring the Act (PMLA) at par with those in the West," said a senior ED official, who did not wish to be identified.

The agency has been at the forefront of many high profile investigations including the recent 12,636 crore fraud at Punjab National Bank allegedly involving jewellers Nirav Modi and Mehul Choksi.

The agency has also been probing fugitive liquor baron Vijay Mallya in the Rs9,000 crore Kingfisher Airlines scam. In August 2017, it stated that it planned to sell a large portion of unpledged shares owned by Vijay Mallya in United Breweries (UB Group), in order to recover more than half the money owed by Mallya to banks and other lenders.

On Tuesday, the ED cracked down on Karti Chidambaram, son of former finance minister P. Chidambaram, in an ongoing PMLA case against him in the Aircel-Maxis deal.

The agency has been probing the aspect of Foreign Investment Promotion Board (FIPB) approvals in the Aircel-Maxis foreign direct investment (FDI), which was granted in 2006, when P. Chidambaram was finance minister.

The ED is also probing Lalit Modi, former chairman of the Indian Premier League (IPL), for having allegedly told selective bidders how much to bid in order to win during the first IPL team auction in 2008. Lalit Modi, BCCI and few other officials have also allegedly contravened the provisions of FEMA, 1999 to the extent of 89 crore.

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Published: 16 Mar 2018, 11:40 AM IST
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