June 22, 2018

Govt revives bill to seize fugitive assets

03 March 2018, 12:05 | Simon Arnold

Nirav Modi

Nirav Modi

Once an application is put forward before the special court to declare an individual a fugitive economic offender, the process to attach that person's property will commence. It was the Congress party which had called Nirav Modi, accused of cheating PNB to the tune of Rs 4886.72 crore, a "chhota Modi".

As per the provisions of the bill, the government will be able to confiscate all the assets of an offender both within and outside the country and the confiscation will not be limited to properties that are proceeds or profits of the crime. He is said to have fled the country and was reportedly last seen in NY after his appearance at the World Economic Forum in Davos as a part of an Indian delegation.

This comes as jewellery designer Nirav Modi is believed to have left the country days before the massive Punjab National Bank scam was revealed. Later an global cooperation mechanism will also be put in place to crackdown on foreign assets of the fugitive offender.

"There have been several instances of economic offenders fleeing the jurisdiction of Indian courts, anticipating the commencement, or during the pendency of criminal proceedings", a government note on the cabinet approval of the proposed bill says.

Without making any bones about why the Fugitive Offenders Bill now, the government has in a way agreed that the absence of such offenders from the courts, among other things, undermines the rule of the law. The bill, when passed, will not allow the offenders to defend any civil claim.

The Bill, however, primarily empowers the Government and investigating agencies to confiscate property and assets of economic offenders and defaulters who flee India.

The bill provides for giving an application before the Special Court for a declaration that an individual is a fugitive economic offender, attachment and confiscation of his property resulting from the proceeds of crime as also his other property in India and overseas, including benami property.

The proposed law aims to impound and sell assets of Nirav Modi-type escapees with a view to quickly recover the dues through special courts.

Jaitley who was briefing the media said that once the FEO Bill becomes an act it will deal with only large cases of economic offences in which Rs 100 crore or more money was involved in a fraud.

The Cabinet was chaired by Prime Minister Narendra Modi, which approved the loan.

In case of an offender being declared a fugitive, an administrator will be appointed to manage and dispose of the confiscated property under the Act. The NFRA is planned to be an independent regulator for the auditors.

"The jurisdiction of NFRA for investigation of Chartered Accountants and their firms under section 132 of the Act would extend to listed companies and large unlisted public companies, the thresholds for which shall be prescribed in the rules", Jaitley said.

Investigators have also arrested 13 people, including some high-ranking bank officials, for their alleged involvement in the fraud.

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