Kolkata Businessman held for role in cash-laundering case

New Delhi: The Enforcement Directorate (ED) arrested Kolkata-based businessman Parasmal Lodha from Delhi in connection with an alleged conversion of over Rs 25 crore in old currency into new notes as part of its investigation under money-laundering laws post demonetisation.

Sources said Lodha, a well-known businessman with interests in real estate and mining, was arrested in the Shekhar Reddy and Rohit Tandon cases. While the Reddy case pertains to Chennai where the income-tax department has made the biggest detection of unaccounted income of over Rs 142 crores, the Delhi police and the I-T department seized Rs 13.5 crores from a law firm here. The firm belongs to lawyer Rohit Tandon. Officials seized Rs 14 crores of which more than Rs 2.2 crores was found in new Rs 2,000 notes from the law firm.

“Investigation by the ED has revealed that the new currency was allegedly arranged and sent by Lodha. He has alleged links with several hawala operators in the country,” sources said. Reddy was arrested by the CBI on Wednesday.

Sources said Lodha was first intercepted by sleuths at the Mumbai airport on Wednesday, based on a lookout circular, while he was reportedly trying to fly out. He was brought back to Delhi by the ED and asked to join investigation.

“During interrogation Lodha admitted that post-demonetisation he and his associates had converted old currency of around Rs 25 crores into new notes for a commission of 15-20 per cent,” sources said.

Later in the day a city court sent Lodha to seven days in ED’s custody. The court was told by ED’s prosecutor Vikas Garg that Lodha was required to unearth the money trail.

Additional sessions judge Sanjiv Jain granted the custody. The ED, in its plea seeking 14 days of remand, said Lodha’s custodial interrogation was necessary to identify the names and details of international hawala operators involved in the matter and others who have committed the offence of money laundering under the Prevention of Money Laundering Act (PMLA). It said Lodha’s custody was necessary for further probe as the case is at a “very crucial stage”. Kolkata-based real estate developer, Lodha, also has interests in mining, finance, consultancy and restaurant firms. The 62-year-old gained prominence after his aggressive takeover of Peerless General Finance and Investment Company Ltd in 1991. His daughter was recently married at a high-profile wedding attended by several politicians.

The ED also submitted that it was making efforts to trace the absconding persons and further ascertain the proceeds of crime and the money trail even involving foreign countries, which may take time. The ED’s prosecutor also argued that Lodha allegedly helped Shekhar Reddy to convert `6 crores in demoentised currency into new notes.

Opposing the ED’s plea, Lodha’s counsel told the court that the allegations against his client were false and baseless. Lodha objected to the ED’s claim and said that he was being framed in the case. He said that he had only shown the way to convert demonetised currency into new motes to Tondon.

He said that he had no lawyers and his family members were not informed about his arrest and said that he wanted to speak to his wife. Lodha also said that he should be given time to bring his counsel to oppose the ED’s application.   

In its application, the agency alleged that Lodha, his associate Rohit Tondon and certain bank officials were involved in a deep-rooted conspiracy converting old demonetised notes into new currency for a commission, which constitutes offence of money laundering.

The ED further alleged that the new currency notes, which were entrusted to banks and government officials and were supposed to be delivered to bank account holders, appear to have been misappropriated by Lodha and others for their monetary gains, thereby “cheating public at large” and causing monetary loss to the central government.

It said he committed offences including those under sections 420 (cheating), 409 (criminal breach of trust by public servant, or by banker, merchant or agent) and 120B (criminal conspiracy) of the IPC.

Officials in the ED said the multiple agencies working on these two high-profile cases, involving high-ranking individuals, are joining the dots of the investigations to prepare a watertight case against those who have either hoarded or generated black funds in the wake of the currency scrap of November 8 by the government.