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Fugitive Economic Offender

Topics Covered:

Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

Effects of liberalization on the economy, changes in industrial policy and their effects on industrial growth.

Fugitive Economic Offender

 

What to study?

For Prelims: Definition of Economic Offender, features of Fugitive Economic Offenders Act.

For Mains: Significance of the law and issues that need to be addressed.

 

Context: A special court has declared diamond businessman Nirav Modi, the key accused in the $2 billion Punjab National Bank (PNB) fraud case, a fugitive economic offender, on a plea of the Enforcement Directorate.

 

Key facts:

Nirav Modi is the second businessman, after liquor tycoon Vijay Mallya, to be declared a fugitive economic offender under provisions of the Fugitive Economic Offenders (FEO) Act, which came into existence in August last year.

 

What’s the issue?

  • As per ED, Nirav Modi and his uncle Choksi, in connivance with certain bank officials, allegedly cheated the PNB to the tune of  ₹14,000 crore through issuance of fraudulent Letters of Undertaking (LoUs).
  • These LoUs were allegedly issued in a fraudulent manner by a Mumbai branch of the PNB to the group of companies belonging to Nirav Modi since March 2011, till the case came to light.

 

Implications:

The investigative agency can now confiscate properties of Nirav Modi which are not directly related to the cases against him.

 

Definition- Fugitive Economic Offender:

A person can be named an offender under the law if there is an arrest warrant against him or her for involvement in economic offences involving at least Rs. 100 crore or more and has fled from India to escape legal action.

 

The procedure:

  1. The investigating agencies have to file an application in a Special Court under the Prevention of Money-Laundering Act containing details of the properties to be confiscated, and any information about the person’s whereabouts.
  2. The Special Court will issue a notice for the person to appear at a specified place and date at least six weeks from the issue of notice.
  3. Proceedings will be terminated if the person appears. If not the person would be declared as a Fugitive Economic Offender based on the evidence filed by the investigating agencies.
  4. The person who is declared as a Fugitive Economic Offender can challenge the proclamation in the High Court within 30 days of such declaration according to the Fugitive Economic Offenders Act, 2018.

 

Sources: The Hindu