SC directs CBI to examine all ED allegations against Indiabulls

The Supreme Court on Tuesday asked the CBI to examine all the six allegations flagged by the Enforcement Directorate (ED) related to alleged dubious transactions involving Indiabulls Housing Finance Limited (IHFL) and related entities. The controversial real estate and financing firm Indiabulls has changed its name as Sammaan Capital and claimed change in shareholding pattern.

On July 28, the top court had pulled up the CBI and Delhi Police’s Economic Offence Wing (EoW) for being silent on allegations of dubious transactions involving IHFL, terming their conduct “shocking” and saying it appeared to be a “case of quid pro quo”. On Tuesday, a bench comprising Chief Justice Surya Kant and justices Joymalya Bagchi and V Mohana took note of the submissions of Additional Solicitor General SV Raju, appearing for the probe agencies, that the ED referred to six allegations, and five aspects are being probed by the EoW.

The law officer said so far as the sixth issue, pertaining to the alleged routing of `1,575 crore, is concerned, the CBI has filed an application before a special PMLA (Prevention of Money Laundering Act) court in Mumbai seeking nod to probe. The bench directed the special judge in Mumbai to decide the CBI’s application for further investigation within two weeks after it takes up the plea on August 24.

“The CBI shall thereafter submit a progress/status report to the Supreme Court,” the bench directed. The court also noted that so far as the EoW probe was concerned, it has given clean chit in all the five allegations probed by the Delhi Police agency.

The EoW was of the opinion that further investigation was not advisable.

Favouring a holistic view of the probes conducted so far by the EoW, the bench directed the CBI to independently inquire into the five allegations already looked into by the EoW, irrespective of the conclusions. During the ED probe, Indiabulls promoter Sameer Gehlaut has left the country to Europe in 2021.

“The CBI is directed to inquire into the five other allegations contained in the ED complaint irrespective of the opinion or report of the Delhi Police EOW and submit a comprehensive report to the court,” it said.
The directions came in a petition filed by ‘Citizen Whistle Blower Forum’ which relied on the ED’s findings alleging suspicious loan transactions, diversion of funds, share-price manipulation and evergreening of loans involving Indiabulls-linked entities.

Advocate Prashant Bhushan, appearing for the petitioner, submitted that a Reserve Bank of India (RBI) circular mandated bank frauds involving more than Rs 50 crore has to be investigated by the CBI.
He said that the six allegations in the ED complaint prima facie disclosed fraud, criminal conspiracy, diversion of funds and evergreening of loans funded through public money. One of the allegations concerned loans of nearly `1,693 crore advanced to entities of the Americorp Group.

Prashant Bhushan said that the loan funds were allegedly routed back into shares of Indiabulls entities, generating profits through manipulated share-price movements.