NEW DELHI: In a major crackdown against black money, the Enforcement Directorate (ED) has arrested Surendra Kumar Jain and Virendra Jain for money laundering using shell companies. .
During investigation in the matter of NKS Holdings Pvt. Ltd. and other companies, controlled by the Jain brothers, it was revealed that during the short period of three months between the opening and closing of the accounts of these companies, there was credit and debit summations to the tune of about Rs 8000 crore, officials said.
This was achieved by way of circular flow of funds through rotational transactions in the accounts of NKS and other companies, which continued till the summations of debit and credit entries reached the total figure of around Rs.1000 crore or more in each of the bank accounts of these companies so as to fictitiously size up its balance sheets. It was an attempt to merge these companies sized up balance sheets with the listed NBFCs so as to give accommodation entries to prospective beneficiaries on future dates, the officials elaborated.
“The modus operandi of Jain Brothers was to launder the unaccounted money through the process of placement of funds, layering of transactions and the final integration of laundering money into the banking channel camouflaged as legitimate share premium transactions. Funds were brought in by the mediators on behalf of the beneficiaries through the mediators. Jain Brothers were providing accommodation entries by accepting funds from their beneficiaries through mediators and converting the same into share premium transactions in the beneficiary company. In this process Jain Brothers earned money as a certain percentage of the unaccounted money converted into share premium,” the ED statement further said.
The Jain brothers were arrested by the agency on Monday and produced before a special PMLA court that granted their custody to the ED for 10 days.
The Serious Fraud Investigating Office (SFIO) had earlier filed criminal complaint in the Tis Hazari Courts here against Jain Brothers and others. A case under Prevention of Money Laundering Act, 2002 (PMLA) was subsequently registered by the ED.
“During the investigation under PMLA, it was revealed that M/s Jagat Project Ltd, has converted its unaccounted money to the tune of Rs 64.70 Crore into apparently legitimate transactions by way of share subscription through various companies. Out of this amount, Rs 62.20 Crore of unaccounted money was laundered through 26 shell companies controlled by Jain Brothers. In lieu of the above accommodation entry of Rs. 62.20 Crore, Jain Brothers received a consideration of Rs. 1,11,96,000,” the ED said in a statement.
The Jain brothers in their statements have revealed the modus operandi involved in the money laundering of Jagat Projects Ltd. ED has already provisionally attached a hotel property to the extent of Rs 64.70 Crore, invested though money laundering, which is being managed by Radisson Blu at Plot No. 4, Sector-13, Dwarka in the national capital.