Money laundering: CBI initiates probe against AAP minister Satyendar Jain
Chief Minister Arvind Kejriwal's government immediately rejected the allegation as "politically motivated" and said it was a "defamatory, malicious and desperate" attempt to malign Jain's image ahead of the Municipal Corporation of Delhi elections on April 23.
Jain was allegedly involved in laundering Rs 11.78 crore during 2010-12 through Prayas Info Solutions Pvt. Ltd., Akinchan Developers Pvt. Ltd., Managalyatan Projects Pvt. Ltd. and Indometal Impex Pvt. Ltd., CBI sources claimed citing the contents of the enquiry.
Jain is also alleged to have been involved in laundering Rs 4.63 crore while being a public servant during 2015-16 through three of these companies, the sources said.
It is alleged that Jain used the ill-gotten money for purchasing agriculture land worth Rs 27.69 crore in Delhi in the name of companies controlled by him.
Jain as Minister in Delhi Government was allegedly using his influence in trying to convert the agriculture land into residential land.
A preliminary enquiry is the first step by the CBI to gather information about the allegations. If the agency is convinced that there exists prima facie material in the matter, it may register a regular case against the accused.
The CBI has acted on a reference from the Income Tax department which was probing the matter under new benami prohibition law.
The Benami Transactions Act carries a maximum punishment of up to seven years rigorous imprisonment and a hefty penalty, and violators could also stand to be charged under the Income Tax Act, 1961.
The Minister had himself dismissed the allegations after Income Tax had last month attached properties linked to him in the matter.
Although Jain had "technically" resigned as Director from these firms before 2013 assembly polls, in which Aam Admi Party (AAP )made anti-corruption a major election plank, he still controlled their operations, it is alleged.
The Kejriwal-led AAP is the main contender in Municipal Corporation elections along with the BJP and the Congress and is hoping to wrest the three corporations from the saffron party which has been controlling them for last 10 years.
However, the CBI action against Jain will further embarrass the AAP which faced criticism after the Shunglu committee recently pointed out "gross abuse of power" by its government.
Latching onto the committee's report, the opposition has accused Kejriwal government of failing to deliver on its main plank of fighting corruption.
Reacting to the development, an AAP government source said, "It is defamatory, malicious and desperate attempt to malign Jain's image ahead of MCD polls."
The source noted that before coming into politics, Jain, being a professional architect, had invested Rs 50 lakh in various companies between 2007 and 2012.
"Jain had also showed all his investment in his income tax return. Such allegations are politically motivated. In July 2013, he had given up directorship in all companies before joining politics," said the source.
According to the PE, Jain allegedly gave Rs 11.78 crore , in cash, through his employees and associates to some Kolkata-based entry operators of shell companies for providing "accommodation entries" in his favour, they said.
Entry operators are agents who launder and route black money using normal banking channels without coming under scanner of banking regulators.
The money was routed back by the entry operators in the form of investment in shares of the companies which were controlled by Jain at nearly 60 times their actual prices, it is alleged.
Shares worth Rs 10 in these companies were allegedly purchased at Rs 590 by the entry operators as investment in companies allegedly controlled by Jain.
It is alleged that these companies did not have any business activity during the period of funding so as to attract such huge funding in the form of share capital and share premium.
The money received back in the form of investment in shares was allegedly used by Jain for purchasing the agriculture land.
Last month, Income Tax department had attached 'benami assets' allegedly linked to Jain in a case of illegal routing of undisclosed funds probed by it.
After the attachment, Jain had issued a statement denying the allegations against him.
"I have earned all my income with my hard work and I have been a tax payer for decades. I am not afraid of any probe about my income details, nor am I scared of any political vendetta," Jain had said.
He had said he was a a professional architect with a practice of nearly 25 years.
Jain had said he had made investments of around Rs 51 lakh between the years 2007 and 2012 in few Pvt Ltd companies.
He had said that since he did not want the conflict of interest, he "resigned" from the boards of companies in which he was a director within 10 days of getting the Aam Aadmi Party ticket to contest Delhi Assembly polls in 2013.
"Within 10 days, (of getting ticket) I resigned (on 31st July 2013) from the boards of companies in which I was a director. I had taken this decision since I was entering politics and I did not want any conflict of interest," he had said.
The Minister had said he has not been associated since 31 July 2013 with any of the companies and he failed to understand how his name was dragged with regard to investment value of the land etc.
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