Govt revives bill to seize fugitive assets

TT, 1 March 2018, New Delhi: The Union cabinet on Thursday cleared a bill that allows the government to confiscate all the assets of an economic offender who has fled the country even if he has not been convicted.

The move comes at a time the government is under fire over diamantaires and bank fraud accused Nirav Modi and Mehul Choksi fleeing the country. The law ministry had cleared the bill last September but it was never placed before Parliament.

Finance minister Arun Jaitley said the bill would apply to new and old cases, providing hope that it could be used against Nirav, Choksi and liquor baron Vijay Mallya, a loan default and money-laundering accused who too has fled the country, among others.

Jaitley said the "fugitive economic offenders bill 2017" was aimed at big offenders who had defaulted on Rs 100 crore or more and fled the country.

He said that all their assets, not just the proceeds of crime, would be confiscated and they would be prevented from pursuing civil cases in the country. An international cooperation mechanism will later be established to crack down on the fugitives' foreign assets.

Jaitley said that unlike the new bill, the Prevention of Money Laundering Act allowed the confiscation only of economic offenders' profits of crime, and only on conviction.

Officials said the bill was being dusted off as Punjab National Bank had argued that the attachment of Nirav's stores and their goods, supposedly valued at Rs 5,100 crore, was not helping as the properties could not be auctioned to compensate the bank.

The bill is likely to be introduced in Parliament in the second half of the budget session, beginning March 5, and fast-tracked. It covers a wide range of offences, including wilful loan default, cheating, forgery, furnishing of fraudulent electronic records, duty evasion and deposit default.

"If a person commits an offence on the list, and a competent court has issued an arrest warrant, and the person leaves the country to avoid this, then the court can deem them fugitive economic offenders," Jaitley said. "We can't allow people to make a mockery of the law, that they first indulge in loot and then leave the country to avoid the law."

He added: "We had announced in last year's budget that we would bring in a law to confiscate the properties of economic offence fugitives. We had been working on this bill for some time. The cabinet has now approved it."

The bill defines a fugitive offender as one against whom a court has issued an arrest warrant and who has left the country to avoid criminal prosecution or refuses to return to face trial.

Jaitley said the bill was focused on the confiscation of assets because the "trial of a fugitive will never be complete". The new law will apply "the moment the warrant is issued (and) the court decides the man is not submitting".

First, a special court will issue a notice to the accused that will be terminated if he appears in court in person within six weeks. But if he sends a lawyer while choosing to stay away from India, a hearing would start to have him declared a "fugitive economic offender".