Money laundering case: ED arrests Shiv Sena MLA Pratap Sarnaik’s close aide

The Enforcement Directorate (ED) officials late on Wednesday night arrested Amit Chandole, a relative and close business associate of Shiv Sena MLA Pratap Sarnaik, in a money laundering case related to TOPSGRUP, a security service giant owned by Rahul Nanda. This is the first arrest in the case.

While ED sources confirmed Chandole’s arrest, the charges on him are still not clear. He will be produced in court on Thursday so that the Central agency can seek his custody for further investigation.

Sarnaik, whose promises were raided by the ED on Tuesday, is into real estate and hospitality businesses. ED officials from Delhi and Mumbai had also raided Chandole’s premises in Thane the same day.

ED is also likely to question Sarnaik’s son Vihang for a second time on Thursday. Other people linked to Sarnaik’s businesses would also be soon asked to join the probe, ED sources said.

ED had interrogated Vihang for five hours on Tuesday. On Tuesday, Sarnaik had termed ED’s actions as vendetta politics. “The day I moved a privilege motion against Kangana Ranaut and Arnab Goswami, and demanded reopening of the Anvay Naik case, I knew what would happen. I am a Shiv Sainik and a fighter who has reached this far. Uddhavsaheb has made me the spokesperson to put forward the party’s views. Today, they told him [Vihang] your father speaks a lot on Kangana Ranaut and Arnab Goswami. I will continue to speak wherever Mumbai, Maharashtra or its police are maligned. I have done nothing wrong in my business,” he had said, while speaking to a news channel.

The central agency suspects that the Sena MLA illegally pumped money into Nanda’s business ventures to move money abroad.

TOPSGRUP group chairman and founder Rahul Nanda has denied the allegations and said, “Pratap is an old friend and has not invested a single penny in my business or company ever! He or Sena has nothing to do with Tops! This is absolutely absurd.”

ED sources said they suspect there is an illegitimate flow of funds among the companies linked to Sarnaik, his family members and Nanda’s companies and that they want to investigate possible money laundering.

ED sources said their probe is based on a complaint registered against TOPS Security, Rahul Nanda and family, at police station on court directions. Company’s former managing director Ramesh Ramkrishna Iyer had approached the court alleging Nanda’s involvement in unlawful activities, massive irregularities in the company, misappropriation of funds to the tune of Rs175 crore and cheating company’s employees, share holders, other government and private organisations with forged documents. The case was recently transferred to the Mumbai police economic offences wing for further investigation.

Iyer, who had been the managing director of TOPSGRUP since 2006, said 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 Rs130 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,” said Iyer’s complaint, adding that Nanda diverted funds from The Shield and bought properties in London.

Iyer 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 returns in India, said Iyer in his complaint.

Iyer also alleged that while providing state government agency MMRDA security services, Nanda cheated the department by not providing them security personnel as decided in the contract, but charging them the full amount. ED suspects that Nanda had political help in grabbing the contract from MMRDA.

Another allegation is 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 and we have given them proof 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 that is in the Mauritius trust. This was all the mischief played by Ramesh (Iyer), Amar (both top executives of his companies) and the coterie, who complained to the ED and have sent them on a wild goose chase.”

Iyer denied Nanda’s counter allegations by saying that his complaint was registered after due verification of facts. Nanda too has made a police complaint against Iyer at the Khar police station some months back.