HC denies bail for NRI Ahmed Buhari in Rs. 564.48 crore money laundering case

Under the Prevention of Money Laundering Act, jail is the norm and bail is the exception, says judge

Under the Prevention of Money Laundering Act, jail is the norm and bail is the exception, says judge

Observing that jail is the norm and bail is an exception under some laws such as the Prevention of Money Laundering Act 2002 (PMLA), the Madras High Court on Monday denied the release on bail of Non-resident Indian (NRI) Ahmed AR Buhari accused of cheating. several public sector power companies by supplying substandard coal at inflated prices and laundering overcharged money through shell companies.

Judge G. Jayachandran said that the allegation made by the Enforcement Directorate (ED) against the claimant was that he supplied substandard coal of Indonesian origin by channeling it through his companies fictitious in Dubai. The embezzled money was transferred to offshore entities in the United Arab Emirates, British Virgin Islands and Mauritius and brought back to India as an equity stake in its Indian entity Coastal Energen Private Limited.

During the investigation, ED detectives had asked the petitioner to provide the bank account statements of the offshore companies involved in the transaction, the original invoices issued by the Indonesian coal miners to its Dubai-based entities and the books of accounts of its foreign entities located in Mauritius and the British Virgin Islands. The petitioner was reluctant to part with these crucial documents and gave evasive answers.

The judge agreed with Additional Solicitor General R. Sankaranarayanan, assisted by ED Special Prosecutor N. Ramesh, that since the petitioner was reluctant to turn over documents critical to the inquest, his mere presence for the inquest n would not amount to cooperation. “To collect these documents, the confinement of the applicant is inevitable, otherwise he can conceal the documents”, wrote the judge.

Further, stating that the petitioner had very shaky roots in the country compared to his strong overseas connections, Judge Jayachandran stated that his previous appearances before the investigator at his time and convenience do not indicate that his presence could be ensured if he decides to leave the country permanently.

The court noted that it was the Directorate of Fiscal Intelligence (DRI) that first suspected in 2017 that the petitioner was involved in supplying coal to public sector power generation companies at a artificially inflated import prices. The inflated price was handed over by India to intermediary firms overseas who in turn only hand over the actual price to Indonesian coal suppliers and the balance was allegedly siphoned off.

Subsequently, in 2018, the Central Bureau of Investigation (CBI) also registered a complaint against him on similar charges, but a final report has yet to be filed. It was on the basis of the CBI case that the ED opened its own independent investigations and arrested the petitioner, who also operates a 1200 MW Mutiara thermal power plant in Thoothukudi and sells electricity to Tangedco, on March 3 .

Although the ED provisionally attached Rs. 6,730.68 crore of properties belonging to the petitioner in February 2020, the provisional order lapsed after 180 days as it was not confirmed in accordance with the procedures contemplated under the PMLA.

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