Amid ongoing controversies and political statements coming from the Opposition block targeting the Enforcement Directorate, the agency has intensified its focus on restitution. In August, the directorate initiated the legal process to return money to victims of fraud and rightful claimants which included two high profile cases of financial fraud. However, over the past two months, the central agency has seized more in other cases of ponzi scams and bank frauds or real estate fraud cases for which the restitution process would begin soon, News 18 has learnt.
Following directives from the Prime Minister’s Office, the ED is now prioritising this effort to ensure that funds taken illegally or fraudulently are swiftly returned to the people, banks and organisations. The accelerated effort by the directorate is to ensure speedy recovery and compensation for victims in financial fraud cases, said a senior officer of the directorate.
“Over the past two years, we have launched the restitution process for nearly Rs 16,500 crore which includes funds for the individuals who were defrauded by ponzi schemes like Rose Valley and others. And in the past two months, we have initiated a process of restitution to give the money back to the victims in the Rose Valley ponzi scam case and SRS case. We have added more assets recovery to the process and the amount for restitution is likely to rise multifold,” added the officer.
Focus on restitution
According to the official records accessed by News18, the directorate has successfully carried out restitution of properties to rightful claimants in three major cases, amounting to over Rs 16,400 crore. This restitution has been made possible under Section 8(8) of PMLA, with amendments introduced in 2018 allowing the restoration of assets during the trial stage, after charges are framed, said another senior officer of the directorate.
“The three notable cases include Vijay Mallya’s, where Rs 14,131.60 crore was restituted to a consortium of public banks led by SBI, and Nirav Modi’s, where Rs 1,052.58 crore was restituted to banks led by Punjab National Bank. Both Mallya and Modi were declared fugitives under the Fugitive Economic Offenders Act, 2018, facilitating restitution in public interest. The banks have already got their money back,” said the officer.
“In addition to the above mentioned instances, over Rs 1,200 crore was restituted to 8,433 public investors defrauded in the National Spot Exchange Limited (NSEL) case. The Bombay High Court appointed a committee to oversee the restitution under the Maharashtra Protection of Interest of Depositors Act, 1999. The Supreme Court also set up a committee, headed by Justice Nandrajog (Retd.), to monitor the process. ED played a key role, restituting 17.19 crore worth of property for distribution,” the officer further explained.
Until September, ED’s restitution efforts have resulted in around Rs 16,400 crore being returned to claimants, mainly public banks and defrauded investors in total, setting significant precedents in India’s fight against financial fraud and ensuring public interest is served by restoring stolen assets during ongoing trials. The officers, involved with the process, said that the directorate is working to return money to more such victims of financial frauds under the relevant sections of PMLA.
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