Govt to move bill to crackdown on fugitive economic offenders
Faced with the combined onslaught of the opposition over the past week in Parliament, the government is introducing The Fugitive Economic Offenders Bill, 2018 in the Lok Sabha on Monday. Alongside, Finance Minister Arun Jaitley will also introduce a bill to make changes in the chit funds law.
The moves are seen as an attempt to underline the government’s commitment to crackdown on economic offenders, who often flee overseas to avoid punishment for their crimes.
The government has been at the receiving end of public and opposition criticism ever since diamond traders Mehul Choksi and Nirav Modi refused to return and face investigators for the Rs 13,000 crore scam involving public sector banks. Many believe that the defrauding of banks by diamond traders could be of a much higher value.
The issue has assumed political overtones as government faces crucial regional elections later this year, which would be a precursor to the general elections scheduled next year.
The broad sweep of the new law states that a person who leaves the country to avoid criminal prosecution or refuses to return to the country and face legal proceedings will be covered by the new law. It also proposes the appointment of an administrator for the disposal of the seized assets.
The government felt that the spectre of high value economic offenders abscond from India to defy the legal process seriously undermines the rule of law in India. It is necessary to provide an effective, expeditious and constitutionally permissible deterrent to ensure that such actions are curbed, sources argued.
There have been complaints that chit fund companies across several States have often been taking poor people for a ride with fanciful plans that often have characteristics of Ponzi schemes.
The bill on fugitive economic offenders empowers the government to seize assets of individuals fleeing the country after defaulting in meeting their financial obligations. Economic offenders will get only six weeks to comply with a notice to escape being declared a fugitive.
A fugitive will be disentitled from bringing forward or defending any civil claim. If the offender returns to India, he or she cannot claim a property. Any individual, including key managerial persons of defaulting companies, will be covered under the proposed law.
To ensure that courts are not over burdened with cases, it has been suggested that only offences involving Rs 100 crore or more will be covered under the proposed law. The bill improves on the existing provisions of the Prevention of Money Laundering Act, 2002 where the property could be seized free from all encumbrances on conviction.
An administrator will be appointed for disposal of the confiscated property after hearing claims in relation to the property and prepare a final list of creditor.