ED arrests former TMC MP K D Singh on money laundering charges
New Delhi: The Enforcement Directorate has arrested former TMC MP and businessman Kanwar Deep Singh in a money laundering case linked to an alleged Rs 1,900-crore ponzi scheme fraud, official sources said on Wednesday.
The agency charged the 59-year-old founder of Alchemist Ltd. with non-cooperation in the investigation and arrested him under the Prevention of Money Laundering Act (PMLA) on Tuesday night. He was produced before a court here which sent him to the ED custody till January 16, they said.
The Trinamool Congress (TMC) is led by West Bengal Chief Minister Mamata Banerjee and Singh, a former Rajya Sabha member of the party, has not been involved in party affairs for quite some time.
Senior Trinamool leader Sougata Roy said the party has no connection with KD Singh now.
"It is true that KD Singh ran a chit fund for Alchemist. It is true that at one time he was a member of the Rajya Sabha from the Trinamool. But the party has had no connection with KD Singh for the last two years," he said.
The central probe agency had carried out searches at the premises of Singh and those linked to him in Delhi and Chandigarh in September, 2019 and had seized cash of Rs 32 lakh and USD 10,000 then.
The businessman was the chairman of Alchemist Ltd., which deals in pharmaceuticals and other sectors, before he resigned in 2012. He is stated to be the Chairman Emeritus and founder of the business group at present.
The ED is probing him as part of two money laundering cases and has questioned him in the past as well.
The instant case against the former MP and a firm linked to him — Alchemist Infra Realty Limited — dates back to September, 2016 when the ED filed a criminal case under the PMLA taking cognisance of a charge sheet filed against the company, its directors and others by SEBI.
The alleged scam is stated to be about Rs 1,900 crore and the agency had attached assets worth Rs 239 crore of Alchemist Infra Realty Ltd in 2019. It has been alleged by investigators that the company launched an illegal collective investment scheme, also called a ponzi or chit fund scheme, and mobilised funds of about Rs 1,916 crore from the public in the years preceding 2015.
According to court filings made by the Securities and Exchange Board of India (Sebi), it had found that "KD Singh is in the process of siphoning off around USD 100 million, earned by way of duping the innocent public in the guise of fake deposit scheme, in buying companies abroad via tax havens".
The Sebi was seeking a thorough probe into Singh's company before the Calcutta High Court in 2018 when it made these revelations.
It had added that Singh was allegedly trying to siphon off the money in association with the business head of a Mumbai-based family-owned group with an international presence, whose name it would disclose during hearings.
Sebi alleged that Singh, through this businessman, has entered into a deal with a Greek business owner whereby a new entity is being created in Cyprus and 10 million euro has been kept in an escrow account till the Greek company's ownership is transferred to Cyprus.
The regulator also alleged that Singh was is in process of buying real estate in Mykonos Island of Greece to construct 'safe' vacation homes and was also acquiring pubs, restaurants and strip clubs in Athens which he is planning to combine with his vacation homes to create a 'private party' club worth 5 million euro. The second money laundering case against him and others is based on an FIR filed by the Kolkata Police.
In this criminal case initiated in 2018, the Kolkata Police had booked Singh, his son Karandeep Singh, Alchemist Township India Limited, Alchemist Holdings Limited and various other group companies and directors for cheating thousands of customers.