The Directorate of Enforcement (ED), Kolkata Zonal Office, achieved a significant milestone on Friday by facilitating the restitution of Rs 19.40 crore to the defrauded investors of the Rose Valley Group. This amount has been transferred to the Rose Valley Asset Disposal Committee (ADC) as per the directives of the Special Court (PMLA), Kolkata, following orders dated July 24 and August 17.
Restitution Process and Legal Proceedings
The ED had requested the Assets Disposal Committee, constituted by the High Court, to seek restitution of properties attached or seized by the ED under the Prevention of Money Laundering Act (PMLA). In compliance, the ADC applied Section 8(8) of the PMLA before the Special Court. Despite opposition from the Rose Valley promoters, the ED and ADC succeeded in obtaining an order for the release of the attached properties for restitution to bona fide investors.
Background on Rose Valley Group Fraud
The Rose Valley Group had collected substantial deposits from the public under false and fraudulent promises of high returns and land allocations. The ED’s extensive investigation led to the identification and attachment of several properties belonging to the group. Two cases under the PMLA were booked: the first involving properties worth Rs 12 crore, and the second involving properties valued at approximately Rs 1200 crore. The successful release of Rs 19.40 crore marks a pivotal step toward further restitution of additional properties as outlined in the second chargesheet.
Disbursement and Compliance Requirements
The Court has directed that the released amount of Rs 19.40 crore should be disbursed to the bona fide claimants on a pro-rata basis or as instructed by the ADC or the Court. Claimants receiving the restitution are required to execute a bond to refund or reimburse the amount if directed at any subsequent stage of the proceedings or upon conclusion of the trial. All claimants must also comply with instructions issued by the ADC regarding the disbursement process.
ED Attaches Rs 31.93 Crore Worth of Assets in M/s Lichen Metals Private Limited Case
New Investigation and Asset Attachment
On August 28, the ED, Kolkata Zonal Office, provisionally attached movable assets worth Rs 31.93 crore belonging to M/s Lichen Metals Private Limited (LMPL) under the provisions of the Prevention of Money Laundering Act (PMLA), 2002. This action follows an investigation initiated based on a charge sheet filed by the CBI under various sections of the IPC, 1860, and the Prevention of Corruption Act, 1988.
Details of the Financial Irregularities
The investigation revealed that LMPL, in collusion with STC officials, created false import indents for 2000 kg of gold. These indents were split into two separate requests to bypass internal financial controls requiring higher approval. Based on these fabricated indents, STC officials fraudulently secured a forward exchange cover for USD 100 million from SBI, intended to protect against exchange rate fluctuations for gold that was never imported. Despite no gold being imported, LMPL, in collusion with STC officials, sought the cancellation of the forward cover two months later, resulting in a wrongful gain of Rs 31.93 crore.
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Further Investigation
The illicit gains were integrated into LMPL’s legitimate business operations, including further gold imports. Further investigation is ongoing.
ED Provisions in M/s Vinayak Nirman Private Limited Case
Bank Balance Attachment in New Case
The Directorate of Enforcement (ED), Allahabad Zonal Office, provisionally attached a bank balance of Rs 4.05 crore under the Prevention of Money Laundering Act (PMLA), 2002, in the case of M/s Vinayak Nirman Private Limited. This action follows an FIR registered by the Uttar Pradesh Police, P.S. Cant, Varuna Commissionerate, Varanasi, under various sections of the IPC, 1860.
Fraudulent Project Completion Certificates
The FIR was based on information shared by the Income Tax Department, alleging that M/s Vinayak Nirman Pvt Ltd used a forged project completion certificate to claim a deduction under Section 80IB of the Income Tax Act, 1961. The certificate, allegedly issued by the Joint Secretary of the Varanasi Development Authority, was fraudulently used to avail of the deduction benefit. The CBDT informed the ED that M/s Vinayak Nirman Pvt Ltd had availed of this bogus deduction with the help of fabricated documents.
Impact and Ongoing Investigation
The fraudulent use of project completion certificates for the residential project “The Varuna Garden” caused significant loss to the government exchequer. The ED is continuing its investigation under the PMLA, 2002, to address the involved illegal activities and recover the proceeds of crime.
(WITH INPUTS FROM ANI)
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