AAP’s Satyendar Jain used dummy directors to launder money: ED in Delhi HC

Following this case, the ED had provisionally attached immovable properties worth Rs 4.81 crore belonging to Akinchan Developers Pvt Ltd, Indo Metal Impex Pvt Ltd, Paryas Infosolutions Pvt Ltd, Mangalayatan Projects Pvt Ltd, and JJ Ideal Estate Pvt Ltd.

It was the ED’s case before the trial court that the companies under investigation were only paper companies that did not earn any income, and that Jain was in control of these companies. Jain, in his arguments before the HC, had said the ED’s case is concerning the check period between February 14, 2015, and May 31, 2017, which is also mentioned in the chargesheet filed in 2018.

Appearing for the agency, Additional Solicitor General S V Raju read out a witness statement before Justice Dinesh Kumar Sharma and alleged that the witness’s mother was good friends with Jain’s wife Poonam, and on a morning walk together, Poonam told the witness’s mother that her son can be appointed as a director in the companies that belonged to them.

“I was appointed as a director in the company JJ Ideal Estate Pvt Ltd… I did nothing except sign documents as a director. I’m not aware of the business of the company and I was not involved in the day-to-day running of the companies. It was controlled by Poonam and Satyendar Jain. I have never been informed of the activity of the company by them,” the witness statement read, pursuant to which Raju argued that Jain employed dummy directors in these companies.

Raju thereafter read statement by one Rajendra Bansal, who allegedly gave accommodation entries stating that the chartered accountant of the companies, J P Mohta, had introduced Bansal to Jain in July-August 2010 and that Bansal was requested to provide accommodation entries for the “companies of Satyendar Jain”. Raju argued that Mohta was not a lay person but a “statutory auditor” so he knew which companies belonged to Jain. Accommodation entries are used to route unaccounted income back to the books of account disguised as loan or share capital.

Raju further relied on statements made by two entry providers including one Ashok Chotani, who said he had “facilitated accommodation entries on the request of Bansal” to Mangalayatan. Raju also read out statements of witnesses who, according to him, had said they should not be confronted with Jain. “My confrontation will create danger to my life and my family members,” one of the witnesses stated in his statement, while another said “his (Jain’s) stature is very big” and that he “received threats whenever he was called to give statements” before the agency, the ED told the court.

On the alleged modus operandi, Raju argued, “Jain would give cash to the Kolkata companies through hawala operator to be delivered to a particular person in Kolkata. A photo of a currency note was given. If the Kolkata person showed the currency note, then money would be given to him. Token was shared through WhatsApp. This money would come back as bogus share subscriptions. There can’t be a better case of money laundering other than this.”

The trial court in its November 17, 2022 order had rejected Jain’s bail plea observing that it “has prima facie come on record that Jain was actually involved in concealing proceeds of crime by giving cash to Kolkata-based entry operators, and bringing the cash into three companies”.

“By this process, the proceeds of crime to the tune of 1/3rd of Rs 4.61 crore has been laundered. Apart from that, Satyendar Kumar Jain has also used the same modus operandi to convert his proceeds of crime of Rs 15,00,000 by receiving accommodation entries from Kolkata-based entry operators… The applicant/accused had knowingly done such activity to obliterate the tracing of the source of ill-gotten money and, accordingly, the proceeds of crime was layered through Kolkata- based entry operators in a way that its source was difficult to decipher,” the court said. Jain moved the HC seeking bail against this order.