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

Cabinet approves Fugitive Economic Offenders Bill to deal with those escaping overseas

From left to right Beleaguered businessman Vijay Mallya Lalit Modi and Nirav Modi

The Union Cabinet, headed by Prime Minister Narendra Modi, has approved the proposal to introduce Fugitive Economic Offenders Bill 2018 in the Parliament, said Finance Minister Arun Jaitley on Thursday.

The Bill allows the confiscation of offenders assets without conviction where they flee the country. "Even benami assets, if any, would be seized".

The Fugitive Economic Offenders Bill 2017 was first mentioned by Jaitley in his Budget speech in 2017-18, against the backdrop of bringing back Vijay Mallya, who owes over Rs 9,000 crore in the Kingfisher Airlines fraud case. "There will also be the provision to confiscate those assets outside India, but co-operation of that country will also be needed".

A wide array of economic offences, including those contained in the Indian Penal Code, the Prevention of Corruption Act, the SEBI Act and the Companies Act, among others, are covered under the Bill.

Fugitive Economic Offender is a person against whom an arrest warrant has been issued in respect of a scheduled offence (a scheduled offence refers to a list of economic offences contained in the schedule to this Bill) and who has left India so as to avoid criminal prosecution, or being overseas, refuses to return to India to face criminal prosecution. The particulars of the bill are not likely to be disclosed since the bill could be tabled in Parliament as early as next week.

The Bill makes provisions for a Court ('Special Court' under the Prevention of Money-laundering Act, 2002) to declare a person as a Fugitive Economic Offender.

The cabinet had also approved the constitution of a National Financial Reporting Authority, which would be "an oversight body" monitoring accounting and auditing irregularities, Jaitley said.

The banks that have been asked to shut down foreign branches include the country's largest lender, State Bank of India (SBI), Punjab National Bank, and Bank of Baroda. "This is triggered by the offender being a fugitive", he said.

He added: "We had announced in last year's budget that we would bring in a law to confiscate the properties of economic offence fugitives". This authority will have it specified on which cases it can act under the rules.

Once both the houses pass the bill, the new legislation will empower investigating agencies to confiscate any property of the absconding offenders without any encumbrances. It will also prevent the offender, if he returns to India, from reclaiming any property. After the alleged economic offender gets declared a fugitive by the special courts, he/she would be provided a period of only six weeks to depose before the investigators.

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