Unitech diverted Rs 2,345 crore to tax havens and other countries, ED informs court

The Enforcement Directorate (ED) on Tuesday informed a local court that its investigation into an alleged diversion of homebuyers’ funds by promoters of Unitech has revealed that Rs 2,345 crore of investor funds were diverted to the Cayman Islands, Cyprus, Isle of Man, Mauritius, Jersey, Singapore, the UK, the US the UAE.
Seeking custodial interrogation of Unitech founder Ramesh Chandra and his daughter-in-law Preeti Chandra, who were arrested on Monday,the agency alleged that the Chandra family had invested the diverted funds in equity of various shell/benami companies. The court sent Ramesh Chandra to ED's custody till October 8 and Preeti Chandra till October 9.

In its remand paper the agency said these shell companies were holding various high net-worth immovable properties. After identification of the properties, an investment of Rs 58 crore in a hotel in the UK had been provisionally attached, said people with direct knowledge of the matter.

The federal agency that probes money-laundering cases has claimed that there were intelligence inputs that Preeti Chandra was actively involved in the management of the foreign assets or transactions of the Unitech group. Till date, the ED has attached alleged proceeds of crime totalling Rs 672 crore, in the form of immovable assets including resorts and hotels, and a helicopter, in India and the UK, according to the remand paper.

The travel history of Preeti Chandra, the wife of former Unitech managing director Sanjay Chandra, has revealed that she was a frequent visitor in places like Dubai and the UK, the ED said.

“She has created layers of money laundering web in a manner which is sufficient to make it difficult for law enforcing agencies to track the money trail of proceeds of crime,” the agency alleged.

It claimed that Preeti Chandra could not explain the source of funds utilised for acquiring the citizenship of Dominica Republic, a tax haven, in May 2018. According to the ED, she has four bank accounts in Dubai. It said despite repeated reminders, she did not provide the statements of these bank accounts.

Citing the statement of a person, whom it described as a dummy director of a company related to Preeti Chandra, the ED said this person disclosed that she had a jewellery and fashion retail outlet in the name of Preeti Chandra Jewels and Fashion which was opened in 2017-18. Seeking seven days of custodial interrogation of Preeti, the agency said that it needs to confront Preeti with this person.

The agency further said that Preeti Chandra also could not provide details of foreign bank accounts of her children and details of investments in India and abroad.

While she informed the ED that she was a director of four companies, she did not supply details of other directors of the companies, board meetings and decisions, the agency said.

It claimed that contrary to her claims, the agency has a list of nine companies/entities in which she was a director/proprietor.

When confronted with the said nine companies, Preeti claimed that she did everything on the instructions of her father-in-law Ramesh Chandra and husband Sanjay Chandra, the agency said, according to people quoted above.

During her questioning in April this year, Preeti Chandra was asked to provide details of her transactions with Unitech and its subsidiaries. She had deposed that she never had any transactions with Unitech or its subsidiaries.

However, the ED claimed that its investigation had revealed that proceeds of crime totalling Rs 347 crore were generated by diverting home buyers’ funds to a company in which she had served as a director.

She made an outward remittance of $200,000 in 2007 for purchasing a car but she did not disclose this fact before investigation, nor provided the source of this fund, the agency told the court.

“Huge amount of money has been generated and involved out of criminal activity. Preeti Chandra has willfully adopted an attitude of non-cooperation by either evading the query or giving misleading and evasive replies,” the agency added, saying that she needed to be confronted with “huge documentary evidence”.

Denying the charges levelled against Preeti Chandra, her counsel, senior advocate Pramod Kumar Dubey, argued that she was never involved in the affairs of Unitech or its subsidiaries.

The ED on Monday arrested Ramesh Chandra, Preeti Chandra and a co-accused named Rajesh Malik in connection with its ongoing probe in a money-laundering case linked to Unitech.