The Enforcement Directorate (ED) has recently attached assets worth ₹24.95 crore of Hero MotoCorp executive chairperson Pawan Kant Munjal. This action is part of a money laundering investigation against him.
What is money laundering?
Money laundering is the illegal process of making large amounts of money generated by criminal activity, such as drug trafficking or terrorist funding, appear to have come from a legitimate source. The money from the criminal activity is considered dirty, and the process “launders” it to make it look clean.
Here's how money laundering typically works:
1. **Placement**: This involves injecting the "dirty money" into the legitimate financial system.
2. **Layering**: This stage conceals the source of the money through a series of transactions and bookkeeping tricks.
3. **Integration**: In the final step, the now-laundered money is withdrawn from the legitimate account to be used for whatever purposes the criminals have in mind for it.
Note that in real-life situations, this template may differ. Money laundering may not involve all three stages, or some stages could be combined or repeated several times.
There are many ways to launder money, from the simple to the very complex. One of the most common techniques is to use a legitimate, cash-based business owned by a criminal organization. For example, if the organization owns a restaurant, it might inflate the daily cash receipts to funnel illegal cash through the restaurant and into the restaurant’s bank account.
Money laundering is a crime in many jurisdictions with varying definitions. It is usually a key operation of organized crime. Most financial companies today have anti-money-laundering (AML) policies in place to detect and prevent this activity
Details of the Attachment
Three immovable properties of Pawan Munjal located in Delhi have been provisionally attached under the provisions of the Prevention of Money Laundering Act (PMLA). The total value of seizure and attachments now stands approximately at Rs 50 crore.
Background of the Case
The ED initiated an investigation on the basis of a prosecution complaint filed by the Directorate of Revenue Intelligence (DRI) under section 135 of the Customs Act, 1962 against Munjal and others for taking foreign exchange/currency out of India illegally.
Allegations Against Munjal
It is alleged that Pawan Kant Munjal got foreign exchange/foreign currency issued in the name of other persons and thereafter utilised the same for his personal expenditure abroad. The foreign currency/ foreign exchange was drawn from authorised dealers by an event management company in the name of various employees and thereafter handed over to Pawan Kant Munjal’s relationship manager.
The relationship manager carried such foreign currency/ foreign exchange in cash/ card secretly, for the personal expenditure of Pawan Kant Munjal during his personal/ business trips. The modus operandi was adopted to override the limits of USD 2.5 Lakh per annum per person under the Liberalised Remittance Scheme.
Previous Actions by ED
The ED had earlier conducted search operations on August 1 on Munjal and related entities/persons and seized valuables worth Rs 25 crore along with digital evidence and other incriminating evidence.
This case is a significant development in the ongoing efforts to curb money laundering and illegal activities in the corporate sector. It serves as a reminder of the importance of adherence to legal procedures and regulations.
Stay tuned for more updates on this case and other news from around the world.
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