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How the ED works, the long hours, intense questioning and vanishing witnesses

With the cream of the opposition leadership under its scanner, the directorate has practically replaced the CBI as the central government’s principal law enforcer  

June 27, 2022 / 12:06 PM IST
Representative image

Representative image

Five days, 50 hours. Sounds like the title of a potboiler, doesn’t it? But this bald statistic, in fact, is the story of the time over five interminably long days Congress leader Rahul Gandhi spent in the company of officials from the Directorate of Enforcement (ED) last week in connection with the National Herald case.

"I was made to sit in a small dark room. There were three  ED officers questioning me. They would leave the room to take instructions, but I sat on the chair for long hours and responded patiently to all their queries,” Gandhi told party workers after the grilling was over, bringing out the drama inherent in such cases.

There are two things that stand out in ED’s questioning – one, those under scrutiny are not the run-of-the-mill accused since substantial money transactions are involved, presumably by those who move in the highest echelons of society. Two, the questioning by ED can go on for hours, days, even weeks and months, say officials from the directorate Moneycontrol spoke to. They spoke on the condition of anonymity.

Discovering a money trail is by no means easy. And after having discovered the trail, to prove the case in a court of law is a job that requires deep economic knowledge, information about illegitimate money networks worldwide, a thorough understanding of Indian and international legal systems and the presence of critical witnesses – needless to say, people involved in such transactions are wealthy, powerful, and opaque.

"That is one of the reasons why it takes so much time at ED. One question can be asked 10 times. Usually, there is a team of three or four agency officials, who interrogate. But getting onto money trails and financial transactions is time-consuming,” well known Mumbai-based lawyer Satish Maneshinde told Moneycontrol.

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He, famously, represented actress Rhea Chakraborty in the Sushant Singh Rajput case, which had come under the scrutiny of both the ED and the CBI.

Getting information on accounts and money stashed abroad to establish a trail is the biggest challenge ED officials confront. The agency sends letters rogatory (letters of request) to different countries to obtain information about individuals and entities offshore – in most cases, it doesn't get a reply.

The Directorate of Enforcement is a law enforcement as well as an economic intelligence agency responsible for implementing economic laws and fighting economic crime in India. It is part of the Department of Revenue, Ministry of Finance, composed of officers from the Indian Revenue Service, Indian Police Service and Indian Administrative Service, in addition to a cadre of its own. The total strength of the department is less than 2,000 officers, out of which around 70 percent come on deputation from other organizations.

The Gandhis, Rahul and his mother, Sonia, the Congress president, are on the ED’s radar now, which is keen to grill them in connection with their alleged role in a case related to the transfer of shares of Associated Journals Ltd (AJL), the holding company that publishes the newspaper National Herald, to another firm called Young Indian Ltd.

Sample some vignettes:

- Rahul was asked what percentage of the company did he own in Young India? If it were a non-profit company, where did this company get all this money from? Was this company formed to acquire (AJL)? Rahul shot back: do you only question Congress leaders or are others also called? The ED team preferred to ignore the jibe.

- In 2019, Ratul Puri, nephew of then Madhya Pradesh Chief Minister Kamal Nath, escaped the agency’s office where he was being questioned in connection with the Rs 3,600 crore AgustaWestland chopper deal case on the pretext of going to the men’s room!

Congress leaders are by no means alone. They join a list of the opposition’s Who’s Who under the ED scanner.

At the spanking new ED office at Pravartan Bhawan in New Delhi, there were four lockups that house VIPs. One of its recent occupants was Satyendar Jain, the Delhi health minister, taken into custody for allegedly laundering Rs 16 crore.

The occupant of another cell is Gurupada Majhi of West Bengal, held on charges of receiving Rs 66 crore in an alleged coal scam.

The ED cells, which until recently housed Jain and Majhi, have a raised platform for a bed, but no ceiling fan or air conditioner. There are vents that ensure air circulation while meals are cooked in the ED kitchen for inmates and staff. Jain was permitted home-cooked food, but Majhi is struggling with a staple diet of lentils (dal), chapatis and vegetables – the ED does not permit non-vegetarian fare as a 'quality control' measure.

Earlier this month, while remanding Satyendar Jain to ED custody, the trial court had allowed his advocate to be present at the time of questioning, where he could see his client but not hear him. The ED vehemently opposed his plea.

On June 20, Jain was admitted to the LNJP Hospital in the capital after he complained of a back ache and palpitations.

In the last few years, the Directorate has become a force to reckon with. This is mainly attributed to its execution of two key laws, the Foreign Exchange management Act (FEMA) and more significantly, the Prevention of Money Laundering Act 2002 (PMLA).

Thanks to the PMLA, the ED is the only central agency in the country, which does not require permission from the government to summon or prosecute politicians, government functionaries and businessmen.

NK Singh, former Joint Director CBI, who famously arrested Indira Gandhi in 1977, told Moneycontrol: ``The fact is that ED has become more powerful than CBI. It has sweeping powers to attach property, under PMLA, even without a conviction. If arrested, it is very difficult to get bail. Unlike the CBI, it does not need any clearances.”

In February this year, the Centre informed the Supreme Court that 4,700 cases are being investigated by the Enforcement Directorate (ED) as of date, and only 313 people have been arrested for the alleged offences since the enactment of the PMLA in 2002. Crucially, nine convictions have come in the last eight months.

“The ED’s eagerness to raid and prosecute individuals does not appear to result in successful prosecutions,” notes Samisti Legal, a corporate law firm, adding: “There have been reports that the ED has attempted to confiscate an individual’s assets by relying on incorrect legal provisions.” Well, it is a sign of ED’s burgeoning clout.
Ranjit Bhushan is an independent journalist and former Nehru Fellow at Jamia Millia University. In a career spanning more than three decades, he has worked with Outlook, The Times of India, The Indian Express, the Press Trust of India, Associated Press, Financial Chronicle, and DNA.
first published: Jun 27, 2022 12:06 pm
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