Law to cage looters and scooters

NEW DELHI: With a spate of alleged economic offenders — Nirav Modi, Mehul Choksi, Vijay Mallya — fleeing India to avoid trial and prosecution, the Centre proposes to enact a law that classifies such offenders as fugitives and empowers government to confiscate their assets in India and abroad. The law may come into effect as soon as April and will apply with retrospective effect.

At a meeting on Thursday, the Cabinet cleared the introduction of the Fugitive Economic Offenders Bill during the current session of Parliament to cover offences of over Rs 100 crore. In another decision, it stripped the Institute of Chartered Accountants of India of powers to initiate disciplinary action against CAs and audit firms dealing with listed companies, large unlisted firms and specific companies.


TOI had exclusively reported on both these proposed laws in its editions dated
February 28+
March 1+

These powers will now be vested with a new regulatory agency — National Financial Reporting Authority (NFRA).

The twin moves ahead of the resumption of Parliament’s budget session on Monday signals the government’s attempts on bringing to book fugitive diamond billionaires Modi and Choksi, who benefited from the letters of undertaking issued fraudulently by PNB executives, as well as auditors who failed to detect the fraud for over six years.

Finance minister Aurn Jaitley told reporters that the proposed law will cover anyone avoiding the law, “whether new or old”, indicating that absconders such as Mallya, who is holed up in the UK, may also face action. While the bill provides for confiscation of overseas assets too, the minister admitted that it will depend on cooperation of foreign governments.

On Wednesday, TOI had reported about the government’s move to activate NFRA, which was provided for in the Companies Act 2013. On Thursday, the newspaper also reported about the cabinet meeting to decide on the proposed legislation for confiscating assets of fugitives with liability of over Rs 100 crore.

Under the proposed new law an individual with arrest warrant for specified economic offences who evades arrest by either fleeing to another country or by staying abroad can be declared a “fugitive economic offender” by a special court. The offender’s properties will be attached, followed by a notice. Based on the court order, property can be confiscated. Confiscation will not be confined to the proceeds of crime and will include all assets, including benami properties.

The Bill also provides for appointment of an administrator to manage and dispose off confiscated property and also dis-entitle the fugitive economic offender from defending any civil claim.

“If at any point of time in the course of the proceeding prior to the declaration the alleged fugitive economic offender returns to India and submits to the appropriate jurisdictional court, proceedings under the proposed Act would cease by law,” an official statement said.

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