The Enforcement Directorate (ED) on Friday told a special PMLA (Prevention of Money Laundering Act) court that Videocon Group laundered around ₹60,000 crore it received from a consortium of banks to develop its oil and gas assets in Mozambique, Brazil and Indonesia, Australia and East Timor. Special Public Prosecutor Sunil Gonsalves and Assistant Director ED also sought a non-bail warrant against businessman Sachin Dev Duggal, alleging that the Videocon Group entered into several “unexplained” transactions with him and the role of “Holdings SA” in siphoning off proceeds of crime was sought activities. However, the court rejected the claim.
Regarding the money laundering charges, the court asked the agency to approach the competent court in Delhi as the ECIR (Enforcement Case Information Report) was registered there.
The ED initiated an investigation based on an FIR registered by the Central Bureau of Investigation (CBI) on 23 June 2020 against the then CMD of Videocon Group, Venugopal Dhoot and some unknown public sector and private bank officials for allegedly causing financial loss to a consortium led by State Bank of India.
The ED alleged that out of the funds raised through various credit facilities, the Videocon Group diverted around USD 196.75 million for unintended purposes. About $1,813 million was also channeled to its overseas entities on the pretext of paying compensation for export advances and loans, the company said.
The ED further said that Videocon Hydro Carbons Holding Limited (VHHL), an overseas firm of the Videocon Group, availed USD 1,256 million from Standard Charted Bank (SCB), London till December 2013. It was partially covered by a standby letter of credit. (SBLC) and partly from proceeds from the sale of assets in Mozambique from 2012 to January 2014.
“Saurabh Dhoot’s (nephew of Venugopalu’s) share was diluted to 10% by issue of new shares to Shashi Duggal, Sachin Dev Duggal’s mother on November 8, 2008 and various other transactions witnessed by Sachin Dev Duggal”, hence his presence before the ED was necessary, he said.
Gonsalves pointed out that the summons was issued to Duggal in January 2022, but he asked for time and later asked to appear on February 12. However, he did not appear, claiming that he was not a resident of India and a citizen of the United Kingdom. . He was subsequently summoned through official channels, but despite visiting India several times, Duggal failed to appear before investigators, he said.
When the court inquired about Duggal’s exact condition, the ED officer said he was a witness in the case. “From the statement of the Assistant Director, ED, New Delhi, it is clear that Sachin Dev Duggal is not an accused at this time but is not responding to the summons. Therefore, a non-bailable warrant cannot be issued immediately as claimed by the ED,” Special Judge MG Deshpande said while dismissing the ED plea.
Besides, the court said that the CBI had registered the FIR in Delhi while the ED had registered the ECIR in Delhi and therefore the ED should move the concerned special PMLA court to the state capital to issue the necessary orders.
“In lieu of referring to the designated Special Courts at Delhi, invoking the jurisdiction of this Court for the prayers made in this application is not warranted,” the court said.
The CBI claimed that its preliminary investigation revealed that in April 2012, the consortium approved a USD 2,773.6 million SBLC facility to VHHL for the appraisal and development of its offshore oil and gas assets in Mozambique, Brazil and Indonesia and other financing requirements in relation to to these assets and to the refinancing of existing facilities.
Of the US$2,773.6 million, about US$1,103 million was refinanced, which included US$400 million from SCB, which had the first lien for Videocon Industries Limited’s (VIL) oil and gas assets abroad.
The CBI further said that in February 2013, VIL informed the consortium that SCB’s loan had increased from US$400 million to US$530 million and asked the consortium to repay it and take over the oil and gas assets. The SBI-led consortium approved and paid $530 million to SCB without any verification or investigation, it said.
After paying the amount owed to SCB, the consortium had to take over VIL’s oil and gas assets and VHHL had to close SCB’s credit account. However, the CBI argued that the consortium did not encumber VIL’s overseas assets and VHHL continued to use facilities from SCB, backed by Mozambican oil and gas assets.
In November 2013, VIL again asked the consortium to settle the SCB loan (for which the banks had already paid $530 million), which had risen to $650 million. The consortium again obliged the Videocon Group and paid SCB $705.45 million instead of the $650 million demand.
The agency alleged that VIL used the funds received from SCB for other purposes or sent the money to other accounts of Videocon or its promoters. The CBI investigation further found that till December 2013 VIL spent only $374 million, $554.83 million and $25.25 million respectively on its assets in Mozambique, Indonesia and Brazil against which VHHL availed $1,616 million. The Bombay High Court recently granted interim bail to Venugopal Dhoot in the ICICI Bank fraud case.
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