Supreme Court orders ED probe into money laundering allegations against erstwhile promoters of Amtek Auto

The Supreme Court on Tuesday directed the Enforcement Directorate (ED) to launch a probe into money-laundering allegations against the erstwhile promoters of auto parts maker Amtek Auto Limited [Jaskaran Singh Chawla vs Union Of India and ors]..The promoters are accused of siphoning off lenders' money to the tune of ₹20,000 crore. A bench of Justices BR Gavai and Sandeep Mehta asked the central agency to file a status report before the next date of hearing which will be after six months.The bench orally observed that, prima facie, there appeared to be material hinting at collusion by bank officials.."We hereby direct that an exhaustive investigation of the issues raised by the petitioner in this writ petition pertaining to huge banking fraud which may run into Rs. 27,000 crores of public money shall be conducted by the ED. We request the learned ASG to issue necessary directions to the ED for compliance of this order," the Court noted.The Court further clarified that the closure or settlement of accounts by the banks concerned will not hinder the ED from fully investigating the matter, including the entire amounts involved in the fraud.The matter will be heard next on September 4, 2024..The order came on a public interest litigation (PIL) petition filed by advocate Jaskaran Singh Chawla seeking an investigation against the promoters, directors, beneficiaries and key-managerial personnel and shell entities of auto parts maker Amtek Auto Limited.The Supreme Court had sought the response of the Central government in the matter on April 5, 2022. Earlier, the Central Bureau of Investigation and the Serious Fraud Investigation Office (SFIO) had also begun probe into the matter with the SFIO engaging the services of forensic auditors to enable it to unravel many of the factual details concerning the financial structure of the company. Some of the banking institutions whose money was involved had agreed that there were fradulent transactions carried out..Senior Advocate Kavin Gulati is the amicus curiae in the matter. Advocate Jai Anant Dehadrai appeared for the PIL-petitioner while Additional Solicitor General SV Raju appeared for the ED..At the time of its insolvency application being admitted by the National Company Law Tribunal in 2017, the auto parts maker had total liabilities worth ₹14,000 crore, having defaulted on bond repayments of nearly ₹800 crore in September 2015.In July 2018, the Chandigarh bench of the Tribunal approved the resolution plan submitted for Amtek Auto by Liberty House.The same was eventually settled with an 80 per cent haircut for Deccan Value Investors in November 2021.Advocates Jai Anant Dehadrai, Pulkit Agarwal, Siddharth Sharma, Sudhanshu Kaushesh, Md Tasnimul Hassan, Martin George, Raghav Sehgal, Avnish Chaturvedi, Prashant Kumar and Vibhu Tandon appeared for petitioner.ASG SV Raju along with Advocates Amrish Kumar, Padmesh Mishra, Arkaj Kumar, Anukalp Jain, Rajat Nair, Ishaan Sharma, Zoheb Hussain, Annam Venkatesh, Mukesh Kumar Maroria, Pademsh Mishra, Arkaj Kumar and Anukalp Jain appeared for respondents. .[Read Order]