The ED initiated the probe based on an FIR registered by the Central Bureau of Investigation in June 2020, against Venugopal Dhoot and some unknown officers of public sector and private banks
NEW DELHI: The Enforcement Directorate (ED) appeared before the special Prevention of Money Laundering Act (PMLA) court on Friday, February 3, 2023, to state that the Videocon Group had laundered around Rs. 60,000 crore that was obtained from a consortium of banks to develop its oil and gas assets in countries such as Mozambique, Brazil, Indonesia, Australia, and East Timor. The ED claimed that the funds were diverted for unintended purposes, including routing over $1,813 million to overseas entities, and a portion of the money was also used by Videocon Hydro Carbons Holding Limited (VHHL), the overseas firm of the Videocon Group.
The ED sought a non-bailable warrant against an entrepreneur, as the agency claimed that Videocon Group had entered into several “unexplained” transactions with him, and the role of “nHoldings SA” in the alleged siphoning off of the proceeds of crime needed to be established. The special judge, MG Deshpande, rejected the plea, stating that an entrepreneur was not an accused but only a witness and a straightway non-bailable warrant could not be issued.
The ED initiated the probe based on an FIR registered by the Central Bureau of Investigation (CBI) in June 2020 against then CMD of the Videocon Group, Venugopal Dhoot, and some unknown officers of public sector and private banks, for causing financial loss to the consortium led by State Bank of India.
The ED claimed that $196.75 million of the funds obtained through credit facilities were diverted for unintended purposes. The ED also stated that VHHL had availed $1,256 million from Standard Charted Bank (SCB), London, until December 2013, which was partly paid from a standby letter of credit (SBLC) facility and partly from the Mozambique assets sale proceeds.
The CBI’s preliminary enquiry revealed that in April 2012, the consortium had sanctioned a SBLC facility of $2,773.6 million to VHHL for appraisal and development of their overseas oil and gas assets and other funding requirements. The SBI-led consortium, without any verification or inquiry, approved and paid $530 million to SCB in February 2013 when VIL informed the consortium that the loan from SCB had increased from $400 million to $530 million.
The consortium also obliged Videocon Group and paid $705.45 million to SCB in November 2013 when the loan from SCB had gone up to $650 million. The CBI alleged that the funds availed from SCB were used for other purposes or sent to other accounts of Videocon or its promoters.
In brief, the special PMLA court told the ED to approach the court concerned in Delhi, as the Enforcement Case Information Report (ECIR) was registered there, and the CBI had registered the FIR in Delhi. The court noted that instead of approaching the designated special courts in Delhi, invoking the jurisdiction of the court for the prayers made in the application was not justified.
