Gujarat: ED opposes bail of Bahubali Shah in ‘money laundering’ case

On May 15, the ED raided the offices of Lok Prakashan Ltd -run Gujarat Samachar newspaper in Ahmedabad and arrested Bahubali. He complained of uneasiness and was first moved to V S Hospital and then, on the request of his family, to Zydus Hospital where he was admitted to the ICU.

He was granted interim bail by a local court for treatment, on May 16. Bahubali then moved a the regular bail application, which came up for hearing on May 31.

The ED submission, accessed by The Indian Express, stated that the aforementioned corporate entities had provided finances to M/s Sugandh Estates and Investments Pvt Ltd (SEIPL), which in turn, opened a large number of fictitious accounts and fraudulently cornered the IPO shares of TCS and NTPC that were meant for retail investors.

On the basis of the SEBI complaint, the ED then registered an Enforcement Case Information Report (ECIR) on August 16, 2023 to investigate into the aspect of “money laundering”.

Subsequently, the agency issued summons to the directors of the said corporate entities. In her statement to the ED on November 28, 2023, accused Saryuben H Vora, director of both companies, had shared details of the sources of income of both the firms which had “cornered the shares of TCS and NTPC”.

“M/s Lok Prakashan Ltd gave Rs15 crore to M/s Zenet Software Ltd and Rs5.86 crore to M/s Excell Multitech Ltd. Further, the court submission further stated that Shreyansbhai S Shah gave Rs3.3 crore to M/s Zenet Software Ltd and Shreyansbhai S Shah HUF gave Rs2.86 crore to M/s Excell Multitech Ltd,” stated the submission by ED.

The ED also said that “the ledger books of the accused corporate entities allegedly revealed that Lok Prakashan Ltd received 6,46,922 shares of NTPC and 13,780 shares of TCS, while Rs10.94 crore were refunded to it by M/s Zenet Software Ltd and Rs4.74 crore were refunded to it by M/s Excell Multitech Ltd via Demand Drafts. Shreyansbhai S Shah (Managing Editor of Gujarat Samachar) received 85,600 shares of NTPC and Rs2.769 crore were refunded to him by M/s Zenet Software Ltd. Further, Shreyansbhai S Shah HUF received Nil shares and Rs2.86 crore were refunded to it by M/s Excell Multitech Ltd.”

The ED submission further stated that it sent four summons to Bahubali, the then Managing Director of M/s Lok Prakashan Ltd, between December 27, 2023 and February 21, 2024. Bahubali appeared before the ED on February 28, 2024, and allegedly submitted that Dhiren Vora, associated with the accused companies, and son of Saryuben had approached him and said he would receive financial benefits if he provided funds to him.

The ED said that when further documents were sought from Bahubali and summons issued, he allegedly neither submitted the documents, nor appeared before the agency.

The ED further sent three summons to Bahubali on March 2, 14 and 28 last year but he allegedly neither appeared nor submitted the documents, “thereby not cooperating with the PMLA investigation”.

After a search was conducted at the premises of Bahubali in Ahmedabad’s Satellite area on May 15, this year, his statements were taken wherein he allegedly undertook to submit the sought for documents within the two weeks, the ED said.

It further said: “…there are reasons to believe based on material in possession, that Bahubali S Shah is actively involved in acquisition, possession, concealment, and use of proceeds of crime obtained and derived as a result of criminal activity relating to scheduled offences (by acquiring IPO shares of NTPC and TCS which were reserved for retail category) and he is guilty of the offence of money laundering under section 3 of PMLA, and punishable under section 4 of PMLA; hence he was arrested under section 19 of PMLA. The analysis of the material gathered and statements of various persons recorded under section 50 of PMLA clearly points out that Bahubali Shah is guilty of the offence of money laundering. Disclosures made by Bahubali Shah under PMLA, warrant his custodial interrogation.”

The ED’s submission also stated, “Further, Bahubali Shah is the son of the founding editor of Gujarat Samachar and a highly influential person having family business running across various sectors including construction, chemical industry, fishing, trade and financial services. Therefore it is possible that Bahubali Shah may influence the witnesses/ other co-accused.”

Advocate Devang Vyas, appearing for Bahubali had told The Indian Express that they had sought time to file a reply and the matter had been adjourned till June 10, 2025.