Shell firms used to launder money, alleges ED affidavit
In its affidavit, the investigating agency has said that even though it collected substantial evidence against the former Union minister to justify his arrest, it would be possible to unravel the truth only after his custodial interrogation.Updated: Aug 27, 2019 01:15 IST
Former home minister P Chidambaram and his aides “created layers of money laundering web in a manner which is sufficient to make it difficult for law enforcing agencies to track the money trail of proceeds of crime”, according to an affidavit filed in the Supreme Court by the Enforcement Directorate, which is seeking his custody for interrogation in the INX Media corruption case, according to people aware of the matter.
In its affidavit, the investigating agency has said that even though it collected substantial evidence against the former Union minister to justify his arrest, it would be possible to unravel the truth only after his custodial interrogation. Hindustan Times has reviewed a copy of the document, which seeks to make a case against a bail application by the senior Congress leader and Rajya Sabha MP.
The Supreme Court on Friday protected Chidambaram from arrest by ED, which is probing the money-laundering aspect of the INX Media case in connection with which he has been arrested by the Central Bureau of Investigation (CBI). On August 22, CBI produced Chidambaram before a special judge, which allowed the agency to interrogate him in custody till August 26. On Monday, the CBI court extended his custody till August 30.
On Monday, following arguments by lawyers from both sides, the court also granted him protection from arrest by the ED till Tuesday, when it will take up the matter again.
In the document, ED contended that it received information about Chidambaram and his “co-conspirators” having influenced witnesses and that attempts were being made to tamper with the evidence in the case. “These are not bald assertions,” said the affidavit, “but can be shown to the Honourable court from case documents”.
The INX Media case relates to alleged irregularities in Foreign Investment Promotion Board (FIPB) clearance given to the media group for foreign investment to the tune of ₹305 crore in 2007, when Chidambaram was finance minister. CBI registered a first information report on May 15, 2017, alleging irregularities in the manner clearance was awarded. ED filed a money-laundering case a year later.
In the affidavit, ED said that its investigation found that several shell companies and 17 benami foreign bank accounts through which money was laundered and invested in several properties were identified. Out of these, 10 properties situated outside India have been identified, the agency said. These investigations were carried out by the Financial Intelligence Unit, ED said.
“Several other shell companies, many more bank accounts and properties abroad have been identified on the basis of intelligence inputs which are received by the investigators working abroad under the PMLA [Prevention of Money Laundering Act] and the investigation is
continuing which can be completed only after the arrest and interrogation of the petitioner-accused and others,” the affidavit said.
ED also alleged that the former minister’s co-conspirators changed the share-holding pattern of shell companies and made changes in the directors of such firms during investigations to distance Chidambaram and his family from the money already laundered.
“It is also found that one bank account of one of the shell companies is closed and another bank account is opened by a co-conspirator. The agency has also received information about sale of properties purchased out of laundered money by one shell company to another shell company,” it said.
While Chidambaram’s lawyers have insisted that the case pertains to events in 2007 and doesn’t require custodial interrogation, ED said in its affidavit that “the accused and co-conspirator [Karti Chidambaram] are still laundering and enjoying proceeds of crime”.
Chidambaram’s legal team declined to comment on the affidavit filed by the ED.
Appearing for Chidambaram, senior advocate Kapil Sibal on Monday opposed the plea for the CBI remand’s extension, arguing that no documents have been shown so far to prove the allegations made against the former Union minister.
Chidambaramam and Karti have consistently denied any wrongdoing and said the case are “polictical vendetta” by the National Democratic Alliance (NDA) government.