The Enforcement Directorate (ED) chief Rahul Navin has asked all his teams to focus on unearthing frauds in insolvency cases involving disproportionately large “haircuts” through which promoters re-acquire assets, a statement issued by the agency said on Tuesday.
Create joint teams, attach assets using police’s powers under BNSS
He recommended the creation of joint teams with state police as well as using the police’s powers under the Bharatiya Nagarik Suraksha Sanhita (BNSS) to attach properties. The ED director also spoke about the agency’s references (sharing of information) to state police forces seeking to register a predicate offence being ignored sometimes, as has been seen in Kerala and Tamil Nadu in the past. Section 107 of the BNSS allows police to attach proceeds of crime in criminal cases for the purpose of compelling the presence of an absconding accused.
At a two-day quarterly conference of the agency that started Monday, he also asked ED officers to identify red flags and initiate money laundering investigations against “masterminds” in such cases, and raised the issue of state police forces not filing cases on the agency’s references. Navin also ordered a review of ED’s requests related to international cooperation, extradition and fugitive “management”. The agency said “closer coordination with the state police and other law enforcement agencies, including recourse to the attachment and bail provisions of the PMLA against organised criminal elements” was also outlined by ED director. Subsequently, the director recommended considering having “joint special investigation teams” with the state police and using “attachment provisions available to the police under the Bharatiya Nagarik Suraksha Sanhita (BNSS) and under special statutes”, the agency added. The ED chief further asked his teams to focus on fast-tracking of trials, “with identification of at least ten high-profile cases in each region for conclusion of trial and conviction within six to eight months”.
The directive on haircuts comes days after a controversy broke out over a National Company Law Tribunal (NCLT) order approving Zee founder Subhash Chandra’s repayment plan of only ₹ 6.5 crore for loans he gave personal guarantee against admitted claims of ₹ 22,000 crore. The decision was stayed by a larger NCLT bench. The Central Bureau of Investigation (CBI) has booked Chandra over a mismatch in stated income while standing guarantee for a loan from LIC Housing Finance and during insolvency proceeding after the loan went into default.
ED is also set to soon file a case in the matter, according to officials.
