Center seized/attached 84.61 percent of all fraudulent funds under PMLA & FEOA

84.61 percent of the fraudulent funds are attached/seized under the Prevention of Money Laundering Act, 2002 (PMLA) and the Fugitive Economic Offenders Act, 2018 (FEOA), and a consortium of banks earns Rs.7,975.27 crore through asset sales.

In a significant development, the Centre informed the Rajya Sabha on Tuesday, March 22, that 84.61 percent of the total defrauded funds in the cases linked to fugitive businessmen Vijay Mallya, Nirav Modi, and Mehul Choksi have been attached or seized, and 66.91 percent of the overall loss to the banks has been handed back to the respective financial institutions.

The Prevention of Money Laundering Act of 2002 (PMLA) and the Fugitive Economic Offenders Act of 2018 (FEOA) both state that the Special Court hearing the case may return any property/assets implicated in money laundering to a third party claimant with a genuine interest, including banks. This was said in a written reply to a question in Rajya Sabha today by Union Minister of State for Finance Shri Pankaj Chaudhary. The Minister claimed that in the instances involving Vijay Mallya, Nirav Modi, and Mehul Choksi, who defrauded public sector banks by syphoning off funds through their firms, the public sector banks suffered a total loss of Rs.22,585.83 crore.

Furthermore, Pankaj Chaudhary was questioned if the government has recommended or will propose returning monies to banks by seizing the properties of businesspeople who left abroad without repaying bank loans.

More specifically, the Minister stated that as of March 15, 2022, assets worth Rs.19,111.20 crore had been attached under the terms of the PMLA. Assets of Rs.15,113.91 crores have been returned to Public Sector Banks. Furthermore, assets worth Rs.335.06 crore have been forfeited to the Government of India.

According to the Minister, as of 15.03.2022, 84.61 percent of the total defrauded monies in these cases had been attached/seized, and 66.91 percent of total damage to banks had been paid back to banks/confiscated to the Government of India. The Minister noted that as on 15.03.2022, the consortium of banks led by SBI has realised Rs.7,975.27 crore from the sale of assets turned over to them by the Directorate of Enforcement.

Economic offenders face charges

Vijay Mallya, the liquor baron and fugitive businessman, is currently in London facing allegations of fraud and money laundering in connection with the Rs.9000 crores obtained by Kingfisher Airlines (KFA) from multiple Indian banks. A consortium of 11 banks that lent Mallya loans, led by State Bank of India (SBI), projected a loss of approximately Rs.6,200 crore as a result of Mallya’s bad loans and demanded the return of his seized properties.

Nirav Modi, who was apprehended on March 19, 2019, is accused of being the “principal beneficiary” of the fraudulent issuance of letters of undertaking (LoUs) as part of a conspiracy to defraud PNB to the tune of Rs.13,578 crore, whereas Mehul Choksi, the owner of Gitanjali jewellers, is accused of duping the Punjab National Bank and syphoning off the money using letters of undertaking.