Supreme Court cancels bail of accused in Chinese investment app money laundering case

The Supreme Court on Tuesday cancelled the bail granted to Bhupesh Arora and rejected the bail plea of his co-accused Rohit Vij in a money laundering case arising from an investigation into alleged fake Chinese-linked investment apps. [Directorate of Enforcement v. Bhupesh Arora].A Bench of Justices MM Sundresh and Prasanna B Varale observed that a compromise in the predicate offence would not extinguish the underlying criminal activity..The Court was hearing the Enforcement Directorate’s (ED) challenge to the Delhi High Court order granting bail to Arora, along with Vij’s plea challenging a separate Delhi High Court order refusing him bail..The case arose from an ED probe into an alleged cyber fraud and money laundering network involving the LOXAM investment app, through which people were allegedly induced to invest money on promises of high returns.The ED registered its case under the Prevention of Money Laundering Act (PMLA) on the basis of a predicate offence registered by the Hyderabad Cyber Crime Police after a complainant alleged that he had been cheated of ₹1.16 lakh through the app.According to the ED, money collected through the alleged fraud was routed through several bank and virtual accounts and subsequently converted into cash and foreign currency..The agency alleged that Vij was involved in operating Ranjan Moneycorp Private Limited and KDS Forex Private Limited, which were used to receive and convert the alleged proceeds.As regards Bhupesh Arora, the ED alleged that he controlled a number of entities through which proceeds from cyber fraud were layered. The agency also relied on statements and financial transactions to allege that cash and foreign currency generated through the network were ultimately delivered to Arora and his associates..The Delhi High Court granted bail to Arora in February after finding prima facie gaps in the material linking him to the alleged money laundering. It also took note of the fact that the predicate FIR had been quashed following a compromise.In a separate judgment, the High Court refused bail to Vij in August, distinguishing his case from Arora’s in view of his alleged role in the cash and foreign-exchange conversion mechanism.The ED then moved the Supreme Court against Arora’s bail, while Vij challenged the refusal of bail to him.The Supreme Court heard the matters together and set aside Arora’s bail while dismissing Vij’s plea..Senior Advocate Mukta Gupta with advocates Hemant Shah and Nitin Saluja appeared for Bhupesh Arora. Senior Advocate Siddharth Aggarwal appeared for Rohit Vij.ED was represented by Additional Solicitor General Anil Kaushik and advocate Arkaj Kumar.