Som Sundaresan: Money laundering laws would be most applicable to Sahara

Tuesday, 18 March 2014 By Legally India Legally Wired

The JSA partner argues that since Sahara’s investors apparently can’t be traced, “in all likelihood, the investors do not exist” so money laundering laws should be applied to preserve rule of law. @CourtWitness1 responded to the column on Twitter, arguing that Subrata Roy was in jail for “brazen defiance” of a SC judgment and therefore in contempt of court, irrespective of the original SEBI order against Sahara [Somasekhar Sundaresan in Business Standard]

Comments

Finally!! 18 Mar 2014, 08:55
+2 -1
I think Som has hit the nail on its head !! We all suspect that the Sahara investors are nothing but a figment of Mr. Roy's imagination... high time someone had the guts to say it out loud
Guest 18 Mar 2014, 10:45
+2 -0
Very well said by Som on both the Money laundering and the personal liberty front!
Enforcement Director 18 Mar 2014, 12:13
+1 -0
PMLA defines money laundering in Section 3 as:

"3. Whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with the [b][u]proceeds of crime[/u][/b] and projecting it as untainted property shall be guilty of offence of money laundering" (emphasis wholly my own)

In Sahara's case, there does not appear to be any 'crime' that has been complained of. There doesn't even appear to be a Complainant as on date.

One would also do well do dwell upon the specific provision under which Subrata Roy has been confined.

This is by no means an attempt to support Subrata Roy - I'm only looking at it from a legal standpoint.
chole bhature vendor 18 Mar 2014, 12:18
+2 -0
Very well said! Of course, corruption is not at all a crime but, in real terms, a pilgrimage in India and, therefore, these are at best the 'proceeds of pilgrimage' !
Enforcement Director 18 Mar 2014, 13:03
+0 -0
@ Chod* bhature vendor:

Corruption under the PC Act is a scheduled offence, yes. But but but, there is no specific person charged with corruption here (surely Subrata Roy alone can't be charged with corruption, being a private individual).

But then again, there is no point explaining the PMLA to folks who don't bother reading its provisions first.
aam aadmi 19 Mar 2014, 05:19
+2 -0
you guys are fighting over a wrong para-phrasing of what the column says. The author had said:

[i][b]"However, Sahara is just unable to demonstrate who the investors are, where they live, and how they have been repaid. In short, it is quite evident to anyone following the case, that in all likelihood, the investors do not exist. Now, that changes not just the shade or complexion of the case, but even the very basic colour of elements involved. If the investors do not exist, it would point to the inference that the tens of thousands of crores of money in the balance sheets and bank accounts of the Sahara companies are from sources that cannot even be demonstrated. If that were true, it would mean that fantastic amounts of cash are converted into bank balances. In the eyes of law, it would be a case of alleged money laundering."[/b][/i]

It has been para-phrased (and in quotes!) above as:

[i][b]"in all likelihood, the investors don't exist so money laundering laws should be applied to preserve rule of law"[/b][/i]
kianganz 19 Mar 2014, 05:27
+0 -0
Thanks for pointing out - had placed the closing quote mark in the paraphrase in the wrong place, now corrected.

Basic paraphrase was not inaccurate though, no, except for lacking some of nuance of original argument?
chole bhature vendor 19 Mar 2014, 05:21
+0 -1
You need to taste my bhature and chole to understand implementation of law. Suppose there is a politician pilgrim - he amasses 5K crs during his pilgrimage- he cannot keep and use such huge cash- he gives it to our punditji- punditji shows this amount slowly in his books as collected from all poor public in the form of Rs 10/15/20 contribution from each person who neither have bank accounts nor KYC docs- then this money routes criss-crossing thousands of entities and then a major portion invested back into an entity remotely owned by the poor pilgrim - when SEBI and SC ask punditji to show who are the investors - he says go to market and meet these guys - and then desktop advisors like you come into the picture.
Prem 19 Mar 2014, 05:55
+0 -1
If there is no investor than what documents are loaded in more then 100 trucks which was send by sahara to sebi. Why not sebi or SC instructed to sebi to ask about these document to sahara and find out the investor with the help of sahara. Definitely there are some politicians who wants to destroy sahara with the help of SC & sebi.
Avinash 20 Mar 2014, 05:18
+0 -0
I agree with you Prem .Everyone is listening to Sebi only and believing them.One should listen sahara's view point also.
Nadia 19 Mar 2014, 06:34
+0 -1
We should not come to any kind of conclusions before the court gives any verdict. Sebi need to be sure what it actually want from Sahara. They themselves are appearing very confused and we should give chance to sahara to explain everything.
Naveen 19 Mar 2014, 07:19
+0 -0
Should we blindly believe what is being said by SEBI which itself is a party in this legal dispute? SEBI is saying that all investors of Sahara-OFCD are bogus. Is it really so? has SEBI even started investor-verification process? Not yet, as SEBI itelf has informed recently in the Supreme Court that it has just completed the scanning the documents submitted by Sahara. Also, August-2012 oredr of the Supreme Court states that, in case SEBI faces any problem in verification of Sahara-Investors, it will take the help of Sahara. But, fact as informed to the court by Sahara is that, SEBI has not given any such list of investors (whose verfication is not being possible by SEBI) to Sahara. And, SEBI has not contradicted this argument by Sahara. Thus, terming Sahara-Investors as bogus is absolutely false statement by SEBI. That is why Government agencies responsible to check money laundering are not getting into this dispute.
Viv 19 Mar 2014, 07:24
+0 -0
This whole judgement itself is based on flimsy grounds created by SEBI & supported by media. The truth will definitely come out some day. The execution of the wrong order is even worse & as we can see the same media which has been the applauding the wrong judgement is unable to defend it. A very bad precedence has been created in the history of the Country. This is UPA - 2.We need to support Sahara in his tough times
Akshit 19 Mar 2014, 07:59
+0 -0
I have been following the issue very closely and came to the conclusion that both the sites are coming up different different scenarios always but not able to proof anything. In between all this fiasco the person who is suffering is Subrata roy and his ill mother.Nothing has been proved but everyone is treating him like a culprit,which is totally unfair.
Guest 19 Mar 2014, 08:42
+1 -1
why only sahara--- why not congress
Megha 20 Mar 2014, 05:19
+0 -1
Everything is totally political. Sahara is being targeted intentionally.
kianganz 20 Mar 2014, 05:23
+2 -0
There's clearly some astroturfing going on here by Sahara, its agents or fans... :)

http://en.wikipedia.org/wiki/Astroturfing
tin 21 Mar 2014, 15:31
+0 -1
Everything is political including the slant of Somasekhar's article. Can someone please analyze the issues legally? Will be great to read.
Duck 22 Mar 2014, 19:22
+0 -0
Well said, Som.
Commenting is closed for this article.