Two arrested in Rs 6,000-crore Bank of Baroda money laundering case

The Enforcement Directorate has arrested a man and his son in connection with its probe in the Rs 6,000 crore Bank of Baroda (BoB) money laundering case.

Officials said businessmen Manmohan Singh Sehgal and Gagandeep Singh Sehgal, were placed under arrest late Tuesday under the provisions of the Prevention of Money Laundering Act (PMLA) for allegedly illegally routing about Rs 245 crore funds to firms based in Hong Kong by using shell companies.

They said the two businessmen will be produced before a court on Wednesday for further custody.

The agency said the two had hired two people who got opened accounts in the Ashok Vihar branch of the BoB here "in the name of the persons having no financial worth on the basis of fake identities".

"The total amount remitted in the guise of fraudulent advance import remittances on the basis of fake documents comes to $37,826,899 (about Rs 245 crore)," the ED said.

It added these firms did not import any goods but these remittances were sent "so as to aid under invoicing of goods" for other companies and thus save import duties.

The agency said the role of the two businessmen, in these remittances, arrested today was also confirmed during questioning of other accused and they are now required to be questioned in detail.

The case had emerged last year and is being probed both by the ED and the CBI and the total scam has been pegged at Rs 6,000 crore.

With this action today, a total of nine people have been arrested by the ED in this case till now.

The ED had earlier termed this case to be an alleged incident of trade-based money laundering, where accused traders evaded custom duties and taxes to generate slush funds.

With an increased thrust of action against shell firms, the agency considers this case to be a classic instance of using such companies to launder funds.

The CBI had also arrested BoB AGM S K Garg and Jainish Dubey, who headed the foreign exchange division, under various provisions of the IPC and the Prevention of Corruption Act as part of its separate probe.