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Cabinet approves law to impound properties of Nirav Modi-type cases

The new law is different from the Prevention of Money Laundering Act, which also provides for confiscation of assets

Press Trust of India  |  New Delhi 

Nirav Modi
Indian jeweller Nirav Modi poses during the launch of his store in Mumbai | Photo: Reuters

In a bid to tighten noose around fugitives like diamond merchant and Mallya, the Cabinet today approved Economic Offenders Bill that provides for confiscating all assets of absconding fraudsters and loan defaulters.

The proposed law aims to impound and sell assets of Nirav Modi-type escapees with a view to quickly recover dues. The law will apply to defaulters who have an outstanding of Rs 100 crore or more and have escaped from the country.

said the Bill, which will be taken to Parliament for approval in the second half of the Budget session beginning March 5, defines a fugitive offender as someone against whom a court has issued an arrest warrant for a scheduled offence and who leaves or has left so as to avoid criminal prosecution, or refuses to return to to face trial.

The new law is different from the Prevention of Money Laundering Act, which also provides for confiscation of assets of economic offenders, he said.

Under PMLA, only profit of crime is confiscated and that too upon conviction. The new law extends to all assets irrespective of whether it is acquired as a result of crime or not, he said. "This is triggered by the offender being a fugitive".

"A trial of fugitive will never be complete," he said, reasoning why confiscation of assets has been provided for. The new law will apply "the moment warrant is issued (and) the court decides the man is not submitting," he added.

The law, though it was announced in the Budget for 2017-18, has been hastened after and his uncle allegedly defrauded state-owned (PNB) of Rs 12,700 crore and left the country and are refusing to cooperate with law enforcement agencies.

The new law will allow quicker recovery of dues through a special court from such absconding offenders.

"In the last Budget, there was an announcement that the government bring law to confiscate assets of fugitives under economic offences. That has been approved by (the) cabinet today," Jaitley said.

He said the law will apply to new and old cases of persons who have fled the country to avoid prosecution.

All assets, not just proceeds of crime, will be confiscated of an offender fleeing the country, he said, adding that offender cannot pursue any civil case in the country.

The Cabinet also approved setting up of a (NAFRA) to regulate erring auditors.

Under first instance, auditors of all listed companies and unlisted large companies will be covered under NAFRA.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Thu, March 01 2018. 19:40 IST
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