After Mehul Choksi & Nirav Modi, SEBI fears this TMC MP will be next to flee the country

File photo of Rajya Sabha member and Trinamool Congress leader K.D. Singh | Commons

In a July affidavit in Calcutta HC, SEBI submitted that Singh allegedly ‘siphoned off’ close to $100 mn to accounts in Europe.

New Delhi: After Mehul Choksi, Vijay Mallya and Nirav Modi, Rajya Sabha member and Trinamool Congress leader K.D. Singh is also going to flee the country, fears market regulator Securities and Exchange Board of India (SEBI), .

The Rajya Sabha MP, representing Jharkhand on a TMC ticket, has been accused of various irregularities including a Rs 1,900-crore Ponzi scheme run by his Delhi-based Alchemist Group.

In July, the market regulator filed an affidavit in the Calcutta high court submitting that Singh had allegedly “siphoned off” close to $100 million to accounts in Europe and is planning to flee the country.

Europe deal

In the affidavit, SEBI submitted, “K.D Singh is allegedly in the process of siphoning off around: USD 100 million, earned by way of duping the innocent public in the guise of fake deposit scheme, in buying companies abroad via tax havens in association with the business head of a Mumbai based family owned group with international presence.”

Through the Mumbai-based business family, Singh has allegedly entered a “deal with a Greek business owner whereby a new business entity is being created in Cyprus, for which Euro 10 million funds has been kept in an escrow account till the Greek ownership company is transferred to Cyprus.” Singh will, then, try to acquire the company and “apply for EU residency and passport,” the affidavit read.

“The shares of a private company (Kolkata-based) were recently acquired as benami from one minority shareholder and process of acquiring shares from another minority shareholder worth Rs 250 crore is on through similar route. Also, in December (2017), a benami property was sold in India and funds were received in UAE as an operating income by a customer with fake invoices,” the affidavit read.

SEBI submitted that though it has all the information, it was not authorised to investigate or recover assets in the case. The regulator implored the court to direct competent agencies to take action with regard to the information submitted.

The regulator further added that the Enforcement Directorate (ED), which was already looking into the Ponzi scheme, will also look into this new development involving funds parked in offshore accounts.

It further sought directions from the division bench comprising Justices Aniruddha Bose and Joymalya Bagchi to pass appropriate orders “directing competent agencies to cause investigation with regard to the allegations.”

However, this is not Singh’s first infraction.

In 2012, Singh came under the scanner of the Central Bureau of Investigation (CBI) when it was probing the cash-for-votes controversy during the 2010 and 2012 elections to the Upper House. The CBI filed an FIR against Singh after evidence and questioning led to his alleged involvement in the controversy.

Singh also allegedly gave Matthew Samuel Rs 80 lakh for the Narada sting operation in which several TMC lawmakers were video-taped accepting cash-bribes in lieu of favours to a company.

West Bengal chief minister Mamata Banerjee even admitted in 2017 that giving Singh a ticket had been a blunder.

Similar petition

The case against Singh is similar to Choksi’s.

In July 2016, a Bhavnagar-based jeweller Digvijay Jadeja had filed an affidavit in the Gujarat high court where he said diamond merchant Mehul Choksi, managing director of Gitanjali Gems, could flee the country to allegedly evade his Rs 9,000-crore debt.

“I would also like to draw kind attention of this Hon’ble Court to the fact that the petitioner has a huge debt of Rs 9,872 crore outstanding which is also specified in the website of Ministry of Corporate Affairs and there are full chances of the petitioner running away like Vijay Malia (Mallya), as his wife is having apartment at Burj Khalifa Dubai and as a result many litigations pending against him can get frustrated (sic),” said Jadeja in the affidavit.

The affidavit added that Choksi has committed “serious criminal offence by way of collecting monthly/yearly installments by its employees, from general public through floating various chit funds schemes.”

“The petitioner (Choksi) is a most intelligent and powerful influential identity and has hired a whole legal team for the purpose of doing systematic fraud, and has cheated various franchisees, shareholders and financial institutions (sic),” the affidavit read.

In the same year, a Bengaluru-based businessman, S.V. Hariprasad, who was also duped by Choksi, wrote to Prime Minister Narendra Modi flagging that Choksi is likely to flee the country.

Hariprasad also highlighted Jadeja’s affidavit among other things but no action was initiated against Choksi.

Other billionaires

Modi and Mallya are the other two high profile billionaires who escaped the net thrown by the probe agencies.

On 2 July, the CBI issued a Red Corner Notice (RCN) against Modi who is being probed in the Rs 13,000-crore Punjab National Bank scam.

Earlier, the Supreme Court held Mallya guilty of contempt on 9 May, 2017, when he failed to declare details of his assets, and upheld the plea by a consortium of banks that sought the initiation of recovery proceedings to the tune of Rs 9,000 crore.

The beleaguered liquor baron, who fled to London on 2 March 2016, is now fighting the extradition charge in the courts there.