ED raids Shiv Sena MLA’s properties, questions son in money-laundering probe against security firm

The Enforcement Directorate (ED) on Tuesday questioned Shiv Sena member of legislative Assembly (MLA) Pratap Sarnaik’s son, Vihang, for nearly five hours after raiding

The Enforcement Directorate (ED) on Tuesday questioned Shiv Sena member of legislative Assembly (MLA) Pratap Sarnaik’s son, Vihang, for nearly five hours after raiding over 10 places, including Sarnaik’s properties, in Mumbai and Thane in connection with a money-laundering case linked to TOPSGRUP, a security service provider company owned by Rahul Nanda. The Central agency suspects that the MLA illegally pumped money into Nanda’s businesses. Tuesday’s raids set off another political storm with Sena and its allies — NCP and Congress — saying BJP was using Central agencies to disrupt the Maharashtra Vikas Aghadi (MVA) government.

Vihang Sarnaik outside ED office at Ballard Estate in Mumbai. (Anshuman Poyrekar/HT Photo)

Sarnaik, who was not at his residence when the raids happened, was later seen coming out of Sena mouthpiece Saamana’s office in Parel, where he held an hour-long meeting with Sena MP Sanjay Raut.

Sarnaik refused to comment on the ED raid or Vihang’s case.

“Let me find out what has happened. So far, we do not have any details,” he said.

Meanwhile, Nanda, in his statement, said, “This is ridiculous! Pratap is a very old friend and has not invested a single penny into my business or company ever! He or Sena has nothing to do with TOPS! This is absolutely absurd and this is again the mischief done by the [company’s] management who have tried to mislead the ED by making these irresponsible and ridiculous allegations!”

ED sources said that their probe was based on an MECR (FIR) registered by Mumbai’s Yellow Gate police station on October 28 on the direction of the 16th Metropolitan Magistrate Court, against TOPSGRUP, Nanda and family members.

The company’s managing director, Ramesh Ramakrishna Iyer, is a complainant in the case and who approached the court alleging Nanda’s involvement in unlawful activities, massive irregularities in the company, misappropriation of funds amounting to ₹175 crore and cheating the company’s employees, its shareholders, other government and private organisations with forged documents. The case was transferred to the Mumbai Police economic offences wing (EOW) for further investigation.

Iyer, who has been managing director since 2006, said that he discovered diversion and misappropriation of funds by Nanda in 2009. Iyer alleged in the complaint (a copy of which is with HT) that in 2008, Nanda bought 51% of London-based The Shield Guarding Company Limited’s shares, for around ₹130 crore. This amount was allegedly taken from ICICI Ventures Limited and private share investors of Everstone Capital. Nanda allegedly inflated the total worth of his net assets since funds worth four times the value of one’s net assets may be sent abroad legally. “The investment companies, despite knowing this, invested in TOPSGRUP,” stated Iyer’s complaint, adding that Nanda diverted funds from The Shield and bought properties in London.

Iyer has also alleged Nanda took loans against subsidiary companies of TOPSGRUP — including Tops Securities UK Limited and Topsgrup Holding BV in the Netherlands — and used the money to buy property in London, which is in violation of loan statutory rules. Nanda did not show the income earned from these properties in his income tax filings in India, said Iyer in his complaint.

Iyer and company’s chief finance officer Amar Panaghal alleged that Nanda made a bogus balance sheet for the financial year of 2018-19 to use overdraft and cash credit facilities from Allahabad Bank (Prabhadevi branch) and Corporate Bank (Kalina branch). For this, he allegedly changed the statutory auditors, without the approval of shareholders.

Iyer also alleged that in 2017, Nanda and his family transferred 66% of their shares in TOPSGRUP to a Mauritius-based Nanda family trust, which is in violation of the Private Securities Agencies (Regulations) Act.

Commenting on the ED’s action and the allegations levelled against him, Nanda, said, “The ED had questioned us about our UK acquisition in 2009, which we have explained and we gave them evidence that everything was done 100% legally. They also questioned me about our trust in Mauritius, which again we have answered and told them that this was created legally by lawyers and that there is zero money in the Mauritius trust. This was all a mischief played by Ramesh [Iyer], Amar [Panaghal] and the coterie who complained to the ED and have sent them on a wild goose chase. We have written and told them [authorities] that all fund transfers done in 2009 was done 100% legally with all requisite legal and RBI permissions.

Iyer has denied all allegations levelled against him by Nanda, saying his complaint was registered after due verification of facts. Nanda, too, has submitted a police complaint against Iyer at the Khar police station some months back.

Early on Tuesday, ED officials from Delhi and Mumbai jointly carried out raids at Sarnaik’s residences and office in Thane amid tight security. The ED detained Vihang for questioning and reached ED office by 3pm. The raids on Sarnaik’s property, including his houses and offices, began around 7.30am. Sarnaik represents the Ovala-Majiwada constituency from Thane and is a popular leader in Thane and the Mira-Bhayander belt of the Sena. Apart from politics, he also owns construction and hospitality businesses under the Vihang Group of Companies.

Sources from ED said, “The raid first started at his residence in Basilius building in Rodas Enclave in Hiranandani Estate. His house on the 28th and 29th floor of the building was raided. The search here went on for over four hours.”

The team later moved on to his other residence at Vasant Lawns in Majiwada and then his office at Dev Corpora building along the Eastern Express Highway. “The search was conducted at over 10 of his properties in Thane. Sarnaik’s elder son Vihang was questioned for over three hours at the Vasant Lawns residence. His younger son Purvesh and his wife were present during the questioning. Vihang was later taken to ED office in Ballard Estate in south Mumbai.”

The team raided the properties amid tight security, along with BSF jawans and local police officers.

Sarnaik and Purvesh had both switched off their phones and were unavailable for comment. Sarnaik, who was out of the country, later reached Mumbai after hearing about the raid and met senior Sena leaders.