Sachiin Joshi remanded in judicial custody in ₹87-crore money laundering case

Businessman and actor Sachiin Joshi, who was arrested by the Enforcement Directorate (ED) on February 14 for his alleged involvement in a ₹87-crore money laundering case, has been remanded in judicial custody by a special Prevention of Money Laundering Act (PMLA) court on Monday.

Businessman and actor Sachiin Joshi, who was arrested by the Enforcement Directorate (ED) on February 14 for his alleged involvement in a ₹87-crore money laundering case, has been remanded in judicial custody by a special Prevention of Money Laundering Act (PMLA) court on Monday.

Actor Sachiin Joshi. (HT FILE)

ED officers on Monday informed the court that the actor has not provided the required information regarding laundering proceeds of crime and sought further custody for seven days. However, the defence lawyer opposed it, saying nothing new has emerged in the ED’s investigation.

Special PMLA judge Abhijeet Nandgaonkar refused to extend Joshi’s ED custody and remanded him to 14 days of judicial custody.

The ED told the court that Joshi has set up companies in Dubai and also has some properties in Dubai. The agency said it wants to confront him with documents related to the same.

“On this point itself when the source of money to be layered which alleged to be processed of crime can be traced by way of documented and statements recorded. But I do not think for this purpose further custody of the applicant (Joshi) is required,” the special judge observed while rejecting plea of ED for Joshi’s further custody.

ED’s investigations has so far revealed that the loans availed by Omkar Group from Yes Bank were diverted and Joshi, son of Gutkha baron JM Joshi, had helped Omkar Group promoters in diversion of at least ₹87 crore.

Joshi’s name came to the fore when the anti-money laundering agency was scanning documents seized during the search and seizure operation carried out at the premises of Omkar Developers last month. ED found certain documents related to payments to the tune of ₹87 crore to certain outside entities (Viikings Group of companies owned by Joshi).

During initial investigation, ED confronted Babulal Varma and Kamal Kishore Gupta, both previously arrested by the agency, about these documents. Varma and Gupta said these payments were made for slum evacuation and slum rehabilitation services for certain Slum Rehabilitation Authority (SRA) projects and a part of it was investment. However, the claim later turned out to be incorrect.

ED said the funds were received by Joshi and his companies from various firms of Omkar Group. Part of the funds was shown as investment and part is shown as received against rendering of services.

When questioned about funds received as investment, Joshi said the same was sent for development of land near Pune. However, no definitive agreement is entered between Omkar Group and Viiking Group with respect to such a huge investment, ED said.

“It is very surprising that an amount of ₹48 crore is shown as an investment, but except for simple term sheet dated March 15, 2019, no definite agreement is made. On analysing the actual utilisation of the funds, it shows that the said funds were utilised for various purposes such as repayment of loans, various expenses etc. However, no expense is seen to be incurred towards the stated purpose of investment,” ED stated in their remand application.

When ED confronted Joshi about it, he said it was a verbal agreement between the promoters of Omkar group and him that till the full payment is received, he can use the received funds as per his needs.

“The said reply of the accused is clearly evasive and does not reflect the true nature of transaction. It appears that the said term sheet of investment is simply used to disguise the real intention of diversion of funds received from Omkar Group of companies and park these funds on behalf of the promoters of Omkar Group. It can be seen that any prudent business transaction would involve definite black and white agreement about investment/utilisation of such huge funds,” ED added.

Investigations regarding the funds received against various invoices raised by the accused has shown that the purpose mentioned in the said invoices were for facilitating settlement of non-eligible tenants and possession of constructed rehabilitation units, help in getting consents from society, slum dwellers, committee members, brokerage towards land deal, etc. However, when Joshi was interrogated about whether any such services were actually rendered, he said no slum rehabilitation work was done by him. He, however, added that he was involved in facilitation with Omkar Group, where Omkar Group was to use his name and brand name in order to rehabilitate the tenants/settle with the tenants.

“This reply of the accused is devoid of any truth and thus evasive. Use of brand name and/or goodwill for settlement of non-eligible tenants appears to be very far-fetched in light of the fact that neither the accused nor his companies had ever done any SRA project or SRA-related works. He himself stated that actual work was done by persons of Omkar Group. Thus, for no actual work done or no actual services rendered, the invoices were raised and funds were diverted in the name of expenses,” ED had submitted before the court previously.

ED’s previous remand application stated that after perusing cash flows of Omkar Realtors & Developers Pvt Ltd for various years, it is observed that there are huge inter-company transactions with group companies including companies from which funds have been transferred to Joshi and his companies.

It is established that loans availed from Yes Bank have been diverted, and Joshi has helped promoters of Omkar Group in diversion of at least ₹87 crore, ED stated.

Joshi was charged for money-laundering under sections 3 and 4 of PMLA, 2002.