Opinion: Catching India’s fugitives

Delhi, IndiaWritten By: Minhaz MerchantUpdated: Aug 02, 2018, 04:42 PM IST

File photos of Mehul Choksi (left) and Nirav Modi (right). Photograph:(WION)

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One new legislation is likely to achieve what years of fruitless policing haven’t: the Fugitive Economic Offenders (FOE) Bill which was passed recently by both houses of Parliament.

The noose is tightening around three of India’s most wanted economic fugitives: Vijay Mallya, Nirav Modi and Mehul Choksi. One new legislation is likely to achieve what years of fruitless policing haven’t: the Fugitive Economic Offenders (FOE) Bill which was passed recently by both houses of Parliament.

The implications of the legislation aren’t lost on Mallya. Extradition notwithstanding, he has begun making preparations to return to India before the deadline of August 27, 2018 set by the PMLA-designated special court. If Mallya doesn’t present himself to the court on that date, his Indian assets can be seized without further notice. Mallya has enough liquid assets in the form of equity shares in listed companies (United Spirits Ltd. and United Breweries Holdings Ltd.) as well as prime properties to pay off the roughly Rs 12,500 crore he owes to banks, employees, vendors and statutory authorities.

Nirav Modi presents a more complex problem. As in Mallya’s case, he was clearly tipped off by rogue elements in the CBI and ED. He fled India weeks before Punjab National Bank (PNB) lodged its complaint against him. Mallya too had left India a day before he was likely to be arrested.

Mehul Choksi planned his escape even earlier. Top jewellers who know Choksi well reveal that Choksi’s companies have been bankrupt for years. They carried on business on the back of fraudulent Letters of Understanding (LoU). Choksi was tipped off by rogue officers in the investigative agencies as early as September 2017. He began preparations to acquire a passport from the twin-island state of Antigua and Barbuda months before the agencies discovered his fraudulent transactions and raided his companies.

But like Mallya, bad news now awaits both Choksi and Nirav Modi. Pressure is mounting on the Antigua government to send Choksi to India to face trial. The Caribbean island, which is a member of the Commonwealth, has a strong Opposition and press. Both have excoriated Antigua’s Prime Minister Gaston Browne and Foreign Minister E Paul Chet Greene for protecting Choksi. Taking a leaf out of the JNU playbook, Choksi has said he fears being lynched if extradited to India. There is of course no extradition treaty between India and Antigua. Choksi can be deported only if India can show credible evidence that he committed financial fraud in India.

Notoriously slow and riven by internal rivalries, the CBI is still putting its case against Choksi together. Its tardiness almost helped Mallya evade justice. Fortunately, Britain’s Crown Prosecution Service (CPS) extracted the necessary evidence from the CBI in time to indict Mallya. The British High Court last week denied Mallya permission to appeal its recent verdict that allowed British authorities to enter and seize goods in the fugitive’s UK properties.

While Choksi is unlikely to get relief from the Antigua government for much longer, Nirav Modi could be in even more immediate trouble. A bankruptcy court in New York last Thursday ‘recognised’ PNB’s claims on the proceeds of any US assets sold by Nirav. The court also ordered summons to examine Nirav and four associates for alleged financial fraud. Nirav Modi will now be forced to appear before the US bankruptcy court when he will be grilled over PNB’s allegations of fraud.

Of the three fugitives – and there are dozens more who have fled India but are not as well known – Mallya ironically may appear the cleanest, if that’s quite the right word. He allegedly engaged in money laundering, siphoned off funds that belonged to his companies, cheated employees by not paying their salaries, cut TDS but did not credit it to the government, defaulted to vendors, and led an extravagant lifestyle while his employees suffered. All of this reflects criminality bordering (in the case of unpaid employees) on cruelty. But what Choksi and Nirav Modi have done is of a different dimension altogether. For years they defrauded clients by selling them fake diamonds for a fortune, cheated banks with fraudulent LoUs and planned their escape from India months in advance. The sheer venality of their criminal actions surpass even the malevolence of Mallya.

There is of course a deeper lesson to be learnt from all this. India’s investigative agencies are corrupt and incompetent. They are fissured by rivalries between senior officers. The open battle between CBI Director Alok Verma and Special Director Rakesh Asthana has brought discredit to India’s premier investigative agency. The war between the ED’s joint director Rajeshwar Singh and Finance Secretary Hasmukh Adhia is equally tawdry. In both cases serious allegations of complicity with economic fugitives like Mallya and Choksi have been made.

The Prime Minister’s Office (PMO) must take the blame for first, not imposing discipline on its IAS and IPS officers and second, for not instituting sweeping police and administrative reforms to improve the efficiency of India’s top two civil services. In Gujarat, as chief minister, Narendra Modi held an iron grip on the bureaucracy. It got work done. At the Centre, the bureaucracy and investigative agencies, wracked by corruption and cronyism, have so far resisted Modi’s efforts to tame them. But tame them he must. Otherwise there will be more Mallyas, Choksis and Nirav Modis laughing all the way to the bank.

(Minhaz Merchant is author of The New Clash of Civilizations: How The Contest Between America, China, India and Islam Will Shape Our Century)

(This article was originally published on The DNA. Read the original article.)

(Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)