A Kolkata-based businessman, arrested in connection with alleged conversion of over Rs 25 crore old currency in new notes, was today sent to seven days in Enforcement Directorate custody by a city court which was told that he was required to unearth the money trail.
Additional Sessions Judge Sanjiv Jain granted ED the custody of businessman Paras M Lodha, who was arrested late yesterday after being questioned here in connection with the conversion of over Rs 25 crore of old notes in to new notes in Shekhar Reddy and Rohit Tandon cases.
The ED, in its plea seeking 14 days remand of Lodha, said his custodial interrogation was necessary to identify the names and details of international and Hawala operators involved in the matter and others who have committed the offence of money laundering under Prevention of Money Laundering Act (PMLA).
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It said Lodha's custody was necessary for further probe as the case is at a "very crucial stage."
While the Reddy case pertains to Chennai where the Income Tax department made the biggest haul of unaccounted income of over Rs 142 crore, the Delhi Police and the I-T seized Rs 13.5 crore from a law firm here belonging to lawyer Rohit Tandon. Reddy was yesterday arrested by the CBI.
The ED today 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.
Opposing ED's plea, Lodha's counsel told the court that the allegations against his client were false and baseless.
In its application, the agency alleged that Lodha, along
with his associate Rohit Tondon and certain bank officials were involved in a deep-rooted conspiracy and indulging in converting old demonetised notes into new currency on commission basis, 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 public/ 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.
As per the agency, Lodha was first intercepted by its sleuths at the Mumbai airport yesterday based on a lookout circular when he was reportedly trying to fly out.
