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‘Sham’ loans, hawala channels, sensitive emails deleted: ED’s claims about I-PAC director Vinesh Chandel
ED has alleged that I-PAC was involved in laundering proceeds of crime to the tune of crores of rupees and the amount detected so far is about Rs 50 crore.
Vinesh Chandel was arrested by ED Monday in connection with a money laundering case linked to alleged coal smuggling. (File Photo)
Seeking custody of I-PAC director Vinesh Chandel, who was arrested on Monday, the Enforcement Directorate (ED) alleged that searches conducted earlier this month at premises linked to the firm and its associates uncovered incriminating documents and digital evidence related to financial transactions and election expenditure, without naming any political party.
The ED alleged that similar documents were also found at the office of a “political party” and the material evidence establishes improper accounting practices, bifurcation of receipts, and the existence of unaccounted transactions. Chandel is considered close to West Bengal Chief Minister Mamata Banerjee and has worked extensively with the TMC in the state and in Meghalaya.
Chandel, a director and co-founder of I-PAC, holds a 33 per cent stake in the company. He was arrested in connection with a money laundering case linked to alleged coal smuggling. The ED has alleged that the political consultancy firm was involved in laundering proceeds of crime to the tune of crores of rupees and the amount detected so far is about Rs 50 crore.
Chandel was produced at Patiala House Courts late at night and the court granted 10 days of ED custody.
Here are the key allegations made by ED in its remand before the court to get Chandel’s custody:
1. Probe revealed I-PAC adopted a modus operandi of splitting receipts between banking channels and unaccounted cash components, including funds received from political parties, the ED claims.
“Documentary evidence, such as references to 50 per cent cheque, establishes that only part of the payments were recorded through formal channels, while the remaining portion was received in cash, thereby generating unaccounted funds. These funds were further utilised for election-related expenditure and other purposes, including influencing public perception,” ED has alleged.
2. It claims that the probe has revealed that I-PAC also introduced an amount of Rs 13.50 crore into its books in the guise of unsecured, interest-free loans from Ramasethu Infrastructure Pvt Ltd during the financial year 2019-20 and 2020-21. The alleged entity is neither a bank nor an NBFC, and no loan agreement, collateral security, due diligence, or repayment terms were in place, it says.
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“Statements of Directors and key managerial personnel confirm that such transactions lacked any commercial rationale. The so-called loan was arranged through persons not formally associated with the company, and decisions were taken at the instance of such outsiders, thereby demonstrating that the transaction was a sham and merely a facade to introduce unaccounted funds into the company’s accounts and conceal their true source and nature,” the agency has claimed.
3. Investigation has revealed that I-PAC raised bogus invoices to justify receipt of funds from multiple third-party entities without rendering any actual consultancy or professional services, the ED alleges.
“These transactions were deliberately structured to provide a colour of legitimacy to otherwise illicit funds and were used for layering and integration of proceeds of crime into the formal financial system. Substantial amounts were credited to the accounts of I-PAC from various entities without any genuine business purpose, thereby establishing that the company acted as a conduit for routing funds,” the ED alleged.
4. Evidence on record establishes that the proceeds of crime were systematically layered and routed through banking channels, while the unaccounted cash component was utilised through informal channels, including hawala transactions, the ED claimed.
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“Statements recorded during investigation under MLA, 2002 reveal the involvement of persons associated with I-PAC in facilitating hawala arrangements, indicating deliberate use of non-banking channels for movement of funds. This dual mechanism of routing funds demonstrates a conscious effort to conceal the origin and project the proceeds of crime as legitimate business income,” it alleged.
5. I-PAC, through its directors, including Vinesh Kumar Chandel, Rishi Raj Singh and others, was allegedly found to be engaged in the generation, concealment, and laundering of proceeds of crime through a structured mechanism of financial transactions. “Chandel, being a founding director and key decision-maker, exercised control over the financial and operational affairs of the company and was actively involved in the processes leading to the generation of Proceeds of Crime (PoC),” the ED claimed.
6. ED apprehends that Chandel may attempt to evade investigation as he travels frequently with multiple foreign visits in recent years, indicating he might abscond, it claimed. The ED also informed the court that after its search proceedings in January, Chandel “managed the deletion of emails and sensitive financial data from the accounts of key employees”.
What Vinesh Chandel’s lawyers said
Senior advocate Vikas Pahwa appeared for the accused, arguing that Chandel consistently joined the investigation and cooperated with the investigating agency. He called the case “nothing but a politically motivated exercise, allegedly set in motion in the backdrop of impending state elections in Tamil Nadu and West Bengal”. IPAC has been associated with the DMK in Tamil Nadu.
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Pahwa also said that the alleged offences of unaccounted money transactions fell within the purview of the IT Act, which is not included in the Prevention of Money-Laundering Act, 2002.
Pahwa also questioned the invocation of sections 420, 120B and 477A of the IPC (cheating and dishonestly inducing the delivery of property, criminal conspiracy and falsification of accounts) in the case. He argued that it was “done with the sole object of artificially bringing the case within the fold of a Scheduled Offence under the PMLA”.
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