In a setback for expelled Samajwadi Party leader Amar Singh , the Allahabad High Court on Friday directed the Enforcement Directorate to investigate cases related to corporate fraud and money laundering during 2003-07.
The cases pertain to allegations of a Rs 500-crore scam in which Singh as the then Chairman of the UP Development Council allegedly received kickbacks from various Government contracts into his shell companies. Those companies were later merged into other firms to muddle the money trail.
Justices Imtiyaz Murtaza and SS Tiwari while dismissing the petition filed by Singh challenging the FIR lodged in the case said that money laundering poses a serious threat to the integrity of the financial system of the country. It said that the case has “national ramifications” which needs a thorough probe, directing ED to commence investigation within two weeks and submit a status report before the court within a month of the probe’s commencement.
A lawyer Shiva Kant Tripathi had lodged an FIR in Kanpur on October 15, 2009, which accused Singh of converting black money into white through shell companies floated by him and also trying to illegally inflate the earnings of companies owned by him so that they could be shown as legitimate income.
Tripathi had accused Singh of forming an endless chain of companies with complex holding structures which were later merged with each other to avoid detection of money trail, said senior advocate Gopal Chaturvedi who appeared on behalf of Tripathi.
The FIR said that Singh during the 2003-07 when he was chairman of UP Development Council awarded contracts to companies owned or controlled by him. He also received kickbacks in companies operated by him.
These companies, totaling 41, were later merged with shell companies like Pankaja Arts and Credit Private Limited in which Amar Singh’s wife, Pankaja Singh, and Bollywood superstar Amitabh Bachchan were shareholders.
Some companies were also merged in Sarvottam Caps Ltd by the order of the Calcutta High Court.The two companies gained more than 400 crore through this process, said the advocate.
Senior counsel Ram Jethmalani, who flew down to Allahabad to defend Singh, said the merger of companies could not be questioned as it was duly approved by the Kolkata High Court. He also claimed that the FIR was politically motivated but could not convince the court.
This order is another legal setback for Singh as recently Supreme Court lifted the gag order on the contents of the tapes of his conversation with several industrialists, politicians, bureaucrats and Bollywood heroines. Economic Times