Daily Pioneer, July 22, 2013
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MONEY LAUNDERING IN NEW PPP AVATAR
Monday, 22 July 2013 | PNS | New Delhi
The Central Economic Intelligence Bureau (CEIB) has unearthed a new modus operandi for converting black money into white through investments in banks. The group of such investors in connivance with certain banks has laundered Rs 1,350 crore of unaccounted money.
The CEIB has termed such investments by the groups as Private Placement Programme. Following the input, the Income-Tax Department has conducted appraisal of at least nine suspicious bank accounts. These bank accounts were being operated on the basis of fake documents.
The Enforcement Directorate has been asked to identify the masterminds, the purpose of the fraudulent scheme of laundering money and the extent of the returns on investments through such placement programmes.The CEIB has also sought information of such cases from the Reserve Bank of India (RBI) and the Financial Intelligence Unit (FIU).
Since the investments in banks were made on bogus documents and with the connivance of the banks, a host of the agencies are probing different aspects of the cases.The Central Board of Direct Taxes (CBDT) has expressed reservations on the outcome of the case as it involved a lot of fake documents.
The banks blocked the funds on behalf of third parties and assured high returns. The banks also issued letters to the depositors certifying the deposits to be clean and unencumbered. Banks do not have authority to issue such letters.
The blocking of funds, assurance of high returns to a third party and the letters certifying the funds to be clean, roused suspicion and the FIU generated a Suspicious Transaction Report.
The FIU has informed other agencies that certain matching entities could be identified on the strings furnished by the CEIB on the modus operandi of the placement programmes. The banks have also been asked to identify the emerging typologies in such deposits.
Expressing concern over the issuance of letters by banks certifying the deposits to be clean, the CBI has sought details of such cases. The RBI has also expressed concern over the involvement of banks and has sought coordination between agencies to unravel the entire racket.
A recent meeting chaired by the Director-General of CEIB along with officials of the Income-Tax department, ED, CBDT, RBI, CBI, FIU and NIA has sought expeditious action with regard to the enquiries in connection with the new modus operandi of the money laundering racketeers.
Private Place Programmes, as opposed to public offerings or an IPO, are a direct offering of shares to a group of investors. Multi agency appraisal reports of such investment have given rise to suspicion. This route is used to funnel black money as such investments are private in nature and disclosure norms are not stringent as compared to IPOs.