Punjab minister Sanjeev Arora sent to 7-day ED custody

A special PMLA court in Gurugram on Sunday remanded Punjab Industries Minister Sanjeev Arora in Enforcement Directorates custody for a week in an alleged Rs 100-crore GST fraud-linked money laundering case, observing that the allegations against him are very serious and the agency needs to question him to unravel the money trail.

A special PMLA court in Gurugram on Sunday remanded Punjab Industries Minister Sanjeev Arora in Enforcement Directorate's custody for a week in an alleged Rs 100-crore GST fraud-linked money laundering case, observing that the allegations against him are ''very serious'' and the agency needs to question him to unravel the money trail. The lawyer for Arora, a senior leader of the Aam Aadmi Party (AAP) in Punjab, alleged that a ''false and frivolous'' case was ''cooked up'' against the minister and that ''no prima facie evidence'' was collected by the investigating officer before his arrest. Arora, 62, was taken into custody by the Enforcement Directorate (ED) on Saturday evening at his official residence in Chandigarh by the following raids by the agency against him. The central agency also searched the premises of a Gurugram-based company named Hampton Sky Realty Ltd (HSRL), in which Arora was a director and shareholder. In a statement on Saturday, the company denied any wrongdoing. It said it has faith in the legal process and is fully cooperating with all statutory authorities and will continue to do so. Arora was brought by agency officials to Gurugram from Chandigarh by road overnight and was produced in the Sessions-cum-special Prevention of Money Laundering Act (PMLA) court of Judge Narender Sura. The ED has alleged that its case was against HSRL, linked entities and Arora, who was the ''beneficial owner and controller'' of the company along with his family members. The company, during the 2023-24 financial year, sold mobile phones worth Rs 157.12 crore to several local and overseas entities, and, as the CMD of the company, Arora was responsible for the conduct of the business of the company, which undertook alleged illicit transactions, the ED told the court. It alleged that the company, in connivance with its directors, employees and linked persons, used ''a network of shell entities'' to generate ''fake'' purchase invoices and used them to show ''bogus'' sales and exports. The agency claimed the minister was the ''key person'' involved in the offence of money laundering by bogus billing, fraud, forgery and payment to shell entities. ''Since the allegations against the accused are very serious and the ED is seeking to decode the money trail, role of the accused, vis-a-vis his persons/aides, who facilitated the offence of money laundering, so as to get to know as to how the accused persons were successful in generating proceeds of crime, in opinion of the court, a valid ground exists for the applicant for custodial interrogation of the accused,'' Judge Sura said in his order. The order said the ED ''has a good and sufficient reason'' to claim the custody of Arora for interrogation and it will be ''just and proper'' that he is remanded to the agency's custody for 7 days. The agency had sought his remand for ten days. ''The ED is duty-bound to trace the money, reveal the modus operandi adopted by the accused for generating proceeds of crime and its circulation from one source to another. ''In my considered opinion, the above mentioned goal can be achieved only when the opportunity is given to the applicant (ED) to interrogate the accused in custody,'' it said. The court observed that the money laundering case stems from a Gurugram Police FIR, filed on April 14, on the basis of information provided by the ED which it found after conducting searches against him in April under the FEMA. ''It has been alleged by the applicant (ED) during the course of investigation of the above mentioned FIR and the present ECIR (ED's FIR) that Sanjeev Arora was the Chairman and managing director of HSRL, and during that, on the basis of forged and fabricated documents, export of mobile phones were shown and GST refunds were received on the basis of bogus purchases and the amount was transferred to multiple shell and intermediate entities,'' the court said. Arora's lawyer told the court that there was ''no material on record'' and it was not demonstrated by the ED as to how his client was having any concern with the alleged offence. The ED told the court that Arora ''committed'' the offence of money laundering in connivance with others, by generating Rs 102.5 crore worth proceeds of crime, by way of purported export and bogus purchases, by way of forging the documents and receiving GST refunds on exports made, which he is not entitled to, and, thereby causing loss to the government exchequer and corresponding wrongful gains to himself. It informed the court that it has recorded the statement of a ''daily wage labourer'' who is shown to be the proprietor of a company which supplied mobile phones to HSRL. The said company and some others like it merely provided ''accommodation entry'' (illicit funds) to HSRL, the ED claimed. The minister's lawyer later told reporters that this was a ''politically motivated'' case. The HSRL said in the statement issued on Saturday that every export of phones made by it was verified at multiple statutory stages by independent authorities outside the company's control, as it denied any wrongdoing. It added that where the GST authorities raised concerns regarding input tax credit, the corresponding amount was already deposited by the company, and it is being contested before the GST appellate authority. The agency has alleged that multiple fake GST purchase invoices were acquired by the company from ''non-existing'' firms in Delhi to falsely claim Input Tax Credit (ITC). Punjab Chief Minister Bhagwant Mann and Aam Aadmi Party (AAP) supremo Arvind Kejriwal condemned the ED action, accusing the Centre of using agencies like the ED and the Central Bureau of Investigation as ''weapons'' to scare opposition leaders into joining the BJP.