New Delhi: The Enforcement Directorate (ED) Thursday arrested Bahubali Shantilal Shah, the managing director of Ahmedabad-based Lok Prakashan Limited, which publishes the leading Gujarat daily, Gujarat Samachar.
Bahubali Shah, the elder son of Shantilalbhai Shah, the newspaper’s founding editor, was taken into custody in Ahmedabad by the investigating officer as part of a probe into an Enforcement Complaint Information Report (ECIR) registered in 2023.
Sources aware of the development said that the case stems from proceedings before the Securities and Exchange Board of India (SEBI), initiated in 2016, related to the misuse of funds for initial public offerings of firms.
After his arrest, he was taken for a medical examination to an Ahmedabad hospital. However, he was then taken to a private hospital on his insistence, citing health conditions. Sources in the agency said it was likely he would immediately move a bail application based on medical grounds.
In 2012, Bahubali Shah and his brother, Gujarat Samachar Editor-in-Chief Shreyansh Shah, along with other family members, settled a similar case initiated by the SEBI without accepting or denying the charges.
Ahead of his arrest, the ED Thursday also conducted searches at premises linked to Lok Prakashan. This also comes a day after the Income Tax (I-T) department initiated searches across 50 premises linked to the firm and its business associates in Mumbai, Vadodara and Ahmedabad.
However, sources aware of the development said that the proceedings of the I-T department and the Enforcement Directorate are “independent” of each other. “The IT searches are in connection with a recently initiated tax evasion case,” an official aware of the development said.
Hours after Bahubali Shah was taken into custody, senior Congress leaders attacked the Narendra Modi-led central government, alleging his arrest was an attempt to silence independent media in the country.
Reacting to Shah’s arrest, the Leader of Opposition in Lok Sabha, Rahul Gandhi said it was another conspiracy to suppress the voice in democracy.
“The attempt to silence Gujarat Samachar is another conspiracy to suppress the voice of not just one newspaper but the entire democracy. When newspapers that hold power accountable are locked, then understand that democracy is in danger,” he said on X.
“The arrest of Bahubali Shah is a part of the same politics of fear that has now become the identity of the Modi government. The country will not be run by sticks or fear – India will be run by truth and the Constitution.”
In another post on X, Congress’s general secretary (organisation) K.C. Venugopal said, “The Gujarat Samachar is fearless in its critique of the Modi-led BJP regime. The ED arrest of owner Bahubali Shah is the BJP’s way of making independent media bend and toe the regime’s line,” .
He called it a “blatant misuse of investigative agencies” and said it was “against the spirit of the Constitution”.
Jignesh Mevani, the Congress MLA from Gujarat’s Vadgam assembly constituency, also attacked the Union government for Bahubali Shah’s arrest.
“The ED today arrested the owner of Gujarat’s biggest newspaper ‘Gujarat Samachar’, Tantri Bahubali Shah, which is extremely shameful! We stand with Gujarat Samachar! This act has been done with the intention of taking revenge for the way this newspaper has criticized Modi and Shah’s policies for the last 25 years,” Mevani said on X Thursday.
The official account of Gujarat Samachar was withheld earlier this month. The reason behind this was not immediately clear.
The Special PMLA court in Ahmedabad granted Shah interim bail Friday after his counsel, Devang Vyas, moved a bail application requesting his release until his regular bail application is pending. The court also documented that the Enforcement Directorate (ED) did not oppose his interim bail, nor did they seek his remand on humanitarian grounds.
The court based its order on the medical history of Shah and the current status of ICU admission at Zydus Hospital in Ahmedabad.
“In view of the serious medical condition of the accused as revealing from the medical case papers and also considering the fact that Enforcement Directorate has not objected interim bail of the accused on medical and humanitarian ground coupled with the fact that no remand is prayed for and also considering submission of Ld. Sr. Advocate for the accused that they will give regular update of medical health condition of the accused to the I.O. and as and when the medical condition of the accused improves he will fully cooperate the investigation and will not make any attempt to hamper or tamper with the prosecution witnesses in any manner, interest of justice would be served if the accused is ordered to be released on interim bail during pendency of hearing of his regular bail application with conditions,” Special PMLA court judge Kamal M Sojitra noted in the order.
Settled similar case in 2012
In the 2006 case, the Shah family was allegedly involved in the irregular trading in multiple IPOs, including Infrastructure Development Finance Company (IDFC) Ltd and Infrastructure Leasing & Financial Services (IL&FS), between 2003 to 2005.
SEBI’s investigation prima facie had revealed that Bahubali Shah, Shreyansh Shah and Shreyansh’s wife, Smruti Shah, had financed operators to pocket shares reserved for retail investors in the IPOs of IDFC and IL&FS.
Based on the investigation, the SEBI had, in January 2006, ordered them not to carry out any transactions in IDFC or any other IPO, directly or indirectly.
Without denying or confirming the allegations against them, the family proposed a settlement, which was accepted by SEBI. In 2012, the family settled the case by paying up Rs 1.34 crore as settlement charges and Rs 1.92 crore as a return of the ill-gotten gains. Bahubali Shah paid up Rs 42.74 lakh to settle the case against him.
This is an updated version of the report
(Edited by Sanya Mathur)