Enforcement Directorate (ED) officials on Wednesday night arrested Amit Chandole, a relative and close business partner of Shiv Sena MLA Pratap Sarnaik, in a money laundering case related to TOPSGRUP, a security services giant. owned by Rahul Nanda. This is the first arrest in the case.
While ED sources confirmed Chandole’s arrest, the charges against him are still unclear. He will be presented in court on Thursday so that the Central Agency can seek his custody for further investigation.
Sarnaik, whose promises were violated by the Emergency Department on Tuesday, is in the real estate and hotel business. ED officials from Delhi and Mumbai had also raided the Chandole facility in Thane on the same day.
ED is also likely to question Sarnaik’s son Vihang for the second time on Thursday. Other people linked to Sarnaik’s businesses will also be asked to join the investigation, ED sources said.
Read also | ED raids Shiv Sena MLA’s property, interrogates his son in money laundering investigation against security company
ED had interrogated Vihang for five hours on Tuesday. On Tuesday, Sarnaik had called ED’s actions a vendetta policy. “The day I filed a motion of privilege against Kangana Ranaut and Arnab Goswami and demanded that the Anvay Naik case be reopened, I knew what would happen. I am a Shiv Sainik and a fighter who has come this far. Uddhavsaheb has appointed me as spokesperson to present the views of the party. Today they told him [Vihang] your father talks a lot about Kangana Ranaut and Arnab Goswami. I will continue to speak out wherever Mumbai, Maharashtra or their police are vilified. I have done nothing wrong in my business, ”he had said, while speaking to a news channel.
The central agency suspects that the Sena MLA illegally injected money into Nanda’s business enterprises to move money abroad.
The president and founder of the TOPSGRUP group, Rahul Nanda, has denied the accusations, saying: “Pratap is an old friend and he has never invested a penny in my business or company! He or Sena has nothing to do with Tops! This is absolutely absurd. “
ED sources said they suspect an illegitimate flow of funds between companies linked to Sarnaik, his relatives and the Nanda companies and that they want to investigate possible money laundering.
ED sources said their investigation is based on a complaint filed against TOPS Security, Rahul Nanda and his family at the police station following court instructions. The former managing director of the company, Ramesh Ramkrishna Iyer, had approached the court alleging Nanda’s involvement in illegal activities, massive irregularities in the company, embezzlement of funds in the amount of Rs175 crore and defrauding company employees, shareholders, other government and private organizations with falsified documents. The case was recently transferred to the economic crimes wing of the Mumbai police for further investigation.
Iyer, who had been the managing director of TOPSGRUP since 2006, said that he discovered the diversion and misappropriation of funds by Nanda in 2009. Iyer alleged in the complaint (a copy of which is with HT) that in 2008, Nanda bought 51% of London shares of The Shield Guarding Company Limited, for around Rs130 crore. This amount was allegedly taken from ICICI Ventures Limited and from private investors in Everstone Capital shares. Nanda allegedly inflated the total value of his net assets as funds worth four times the value of one’s net assets can be legally sent abroad. “Investment companies, despite knowing this, invested in TOPSGRUP,” said Iyer’s complaint, adding that Nanda diverted funds from The Shield and bought properties in London.
Iyer also alleged that Nanda took out loans against TOPSGRUP subsidiary companies, including Tops Securities UK Limited and Topsgrup Holding BV in the Netherlands, and used the money to buy property in London, in violation of legal lending rules. Nanda did not show the income earned from these properties on his Indian income tax returns, Iyer said in his complaint.
Iyer also alleged that while providing MMRDA security services to the state government agency, Nanda misled the department by not providing them with security personnel as decided in the contract, but charging them the full amount. ED suspects that Nanda had political help in obtaining the MMRDA contract.
Another accusation is that Nanda made a false balance sheet for the 2018-19 fiscal year to use the cash credit and overdraft facilities of Allahabad Bank (Prabhadevi branch) and Corporate Bank (Kalina branch). To do this, he allegedly changed legal auditors, without the approval of the shareholders.
Iyer also alleged that in 2017, Nanda and her family transferred 66% of their shares in TOPSGRUP to a trust of the Nanda family based in Mauritius, in violation of the Private Securities Agencies (Regulation) Act.
Commenting on the DE’s action and the allegations leveled against him, Nanda said: “The DE had questioned us about our acquisition in the UK in 2009 and we have given them proof that everything was done 100% legally. They also asked me about our trust in Mauritius, which we again answered and told them that this was legally created by lawyers and that there is no money in the Mauritius trust. This was all the antics of Ramesh (Iyer), Amar (both senior executives of their companies) and the clique, who complained to the Emergency Department and sent them on a futile search. “
Iyer denied Nanda’s counter-accusations, saying that his complaint was registered after due fact verification. Nanda also filed a police report against Iyer at Khar Police Station a few months ago.
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