Delhi's Rouse Avenue court on Thursday extended Avantha Group promoter Gautam Thapar's Enforcement Directorate (ED) custody for another ten days in a money laundering case.
The court further allowed Thapar a half-hour long legal meeting with his lawyer, Sandeep Kapur, Senior Partner, Karanjawala & Co., this evening, in the offices of the Enforcement Directorate.
Thapar was presented before Delhi's Rouse Avenue Court through video conferencing on the expiry of his one-day custody. ED has arrested Avantha Group promoter Gautam Thapar in a money laundering case following searches at multiple locations in Delhi and Mumbai on Tuesday.
On August 4, Thapar was remanded to one-day ED custody.
ED has sought extension of custody of Thapar in the matter which was opposed by Thapar's defence counsel Vijay Aggarwal and Sandeep Kapur. Gautam Thapar is being represented by a team from Karanjawala and company.
An ECIR has been registered against Gautam Thapar, Avantha Realty Ltd., Oyster Buildwell Pvt. Ltd. and others, alleging criminal breach of trust, cheating, criminal conspiracy and forgery for diversion/misappropriation of public money during the period 2017 to 2019.
Additional Solicitor General SV Raju and Public Prosecutor NK Matta were appearing for ED.
Defence counsel Vijay Aggarwal and Sandeep Kapur said that the evidence in the case being primarily documentary in nature, custodial interrogation is not required, that in such an investigation, a case diary ought to have been maintained by the ED and the Court should be able to summon such case diary in order to review the investigation conducted and that the ED ought not to have arrested Thapar, as the current ECIR is based on a scheduled offence and the investigation of the CBI has barely progressed.
Advocate Vijay Aggarwal submitted before the Court that his client was in fact the victim in the matter and that the entire transaction had taken place in view of the intention of Yes Bank to have evergreening of loans.
Advocate Aggarwal stressed upon the fact that an email had been received by the Avantha Group from Yes Bank, wherein the entire documentations that were to be executed and the transactions that had to take place were forced upon the Group.
Advocate Aggarwal further argued that against the loan of Rs 515 Crores, Yes Bank had got issued security of Rs 750 Crores in its favour, after releasing of security by the Other Financial Institutions and that the entire transaction was done in terms of the directions issued by the Yes Bank.
ED has told the Delhi Court that investigation revealed that approximately Rs 500.11 crores proceeds of crime, were laundered through Oyster Buildwell Pvt Ltd (OBPL), Jhabua Power Limited (JPL), Jhabua Power Investment Ltd. (JPIL), Avantha Power and Infrastructure Ltd (APIL), Avantha Realty Ltd. (ARL) etc. which are being controlled and beneficially owned directly or indirectly by Gautam Thapar.
The prosecutor further told the court that the probe disclosed that sham agreements were made by these entities to fraudulently obtain huge amounts running into more than Rs 500 crores from Yes Bank and further by different modes of layering the tainted amount was laundered and the loan account thus turned NPA causing a loss of huge public money.
"The probe revealed that JPL entered into a sham Operations and Management agreement for its Thermal Power Project with its group company namely JPIL for a monthly consideration of Rs 7.5 crores and JPIL entered into a further sham sub-contract for the same work with OBPL for a monthly consideration of Rs 15 crores," said the prosecutor.
To give a plausible justification and explanation for seeking of loan, the ED stated, "A special clause related to the provision of an interest-free security deposit to be kept by OBPL to JPIL to the tune of Rs 514.27 crore was added in the non-genuine agreement executed between JPIL and OBPL which was sought as loan from Yes Bank and that OBPL is a paper company with no business activity," adding that the company has had no employees working in it and has just held landholdings in its name.
ED said that the facts have been provided by one of the present directors of the company and confirmed by two other directors.
That OBPL had no prior experience of handling Operations and Maintenance (O&M) work of Thermal Power Plant and neither was any service given by OBPL to JPIL with regard to the O&M agreement nor was any consideration paid by JPIL to OBPL, the agency said.
ED said that there is material evidence and reasons to believe that Gautam Thapar is guilty of the offence of money laundering as per section 3 punishable under section 4 of the PMLA, adding that Thapar is involved in the laundering of proceeds of crime and has been involved in projecting the proceeds of crime as untainted.
During the course of the investigation, searches were conducted on premises belonging to Gautam Thapar and the entities associated with him.
ED said that statement of Gautam Thapar was recorded in the instant ECIR in which he did not cooperate with the investigation on three different occasions i.e July 24, July 27, and August 3 and deliberately failed to divulge the crucial facts regarding his involvement in the instant loan, his coordination and involvement with earlier Yes Bank management, the details of overseas companies/trusts/bank accounts/properties owned by him and his family which are actually required for further investigation.
The case is having international ramifications involving Proceeds of Crime stashed outside the country in form of immovable properties and bank accounts which is to be unearthed, the agency said.
It further added that custodial interrogation of the Gautam Thapar is essential to further determine the role of various other persons who facilitated the offence of money laundering and how and by whom the funds were placed, layered and integrated into the system, to determine the entire modus operandi.
"Custodial interrogation of Gautam Thapar is essential to establish the money trail or end-use of the initiative taken loan which was re-paid through the instant fraudulently obtained loan from Yes Bank and Gautam Thapar is to be confronted with the material/evidence on record," ED said.
The agency further added that the custodial interrogation of Gautam Thapar would enable the investigating agency to ascertain and identify the funds laundered and parked in various entities. It said his custodial interrogation is, therefore, required for an effective investigation of the case to bring the instant case to a logical conclusion.
"Illegal favours are found to have been extended by Yes Bank to Avantha Group. Any quid pro quo for extending such illegal benefit is yet to be ascertained," ED said.
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