Mumbai court sends builder to ED custody in Money laundering case

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A Mumbai court on Thursday remanded city-based builder Vijay Machindar in the custody of the Enforcement Directorate till January 12 in an alleged Rs 700 crore money laundering case.

Accused of cheating several flat buyers, he was arrested by the probe agency on Wednesday under the Prevention of Money Laundering Act (PMLA), newswire PTI reported.

Special PMLA judge M G Deshpande of a Mumbai court, while remanding him in ED custody, noted that money laundering was a serious offence.

"Huge public money is generally involved in such offences and in the instant case the same is Rs 734 crore. The ED has not only to trace out the trail of said money, but also find out end-use thereof. Thorough investigation in such a situation is necessary which cannot be done unless the accused is remanded in ED custody," the Mumbai court held.

As per the agency, the complainant in the case paid Rs 15,60,40,000 to the accused through his bank account and another Rs 28 crore in cash for buying 14 flats.

But he was given allotment letters of only three flats. The builder, in fact, did not hand over the possession of a single flat to anyone and allegedly defrauded the flat buyers of Rs 74 crore, the ED said.

The construction did not advance beyond ground excavation, the probe agency added.

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A case under IPC section 420 (cheating) was registered against him, based on which the ED recorded its Enforcement Case Information Report (ECIR) and started a parallel probe.

The ED, in its remand plea, also claimed that Machindar took loans, and to pay them off, took more loans.

There were claims of Rs 734.27 crore against him before the National Company Law Tribunal as of May 30, 2023, which is proceeds of crime, the ED argued.

Meanwhile, the Enforcement Directorate Thursday said it recently searched premises linked to a honorary counsel to Mauritius and promoter of the Chennai-based R R Group, Ravi Raman, as part of an investigation linked to an alleged fraud in foreign funds against him.

Eight locations "connected to" Raman were raided by the central agency on December 28 last year under the provisions of the Prevention of Money Laundering Act (PMLA).

The money laundering case against Raman and his wife Shobhana Ravi stems from a Chennai Police Central Crime Branch (CCB) complaint that alleged cheating, forgery, and criminal conspiracy for "swindling foreign funds/investments of Rs 117 crore received from the Old Lane Group."

Raman, the ED alleged, funnelled the funds received from the group (Old Lane) in the form of FDI for the development of a tech park in Ambattur.

"Certain properties of group companies were kept as collateral/security in lieu of the funds received from the foreign investor and an irrevocable GPA (general power of attorney) was signed in favour of the foreign investor.

"Ravi Raman also filed a fake FIR on the basis of the pledged property documents being lost and subsequently sold the pledged properties by illegally cancelling the GPA," it said.

Ravi Raman siphoned off "some of the funds during the crime period through his Singapore-based entity R R Industries Singapore Pte Ltd which was further invested in Indonesian coal mines along with Novem Coal Resources Pte Ltd which is owned by his cousin," it said.

The agency said it seized Rs 64 lakh in "unaccounted" for cash, a significant number of property deeds, and documents having a value of more than Rs 850 crore during the searches.

The investigation also found that R R Group received other foreign investments from entities that are based overseas and it being investigated, the ED said. (With inputs from agencies)