Once the Bill becomes law, it will empower investigating agencies to confiscate unpledged properties of the absconding offenders.
India's federal cabinet on Thursday approved a bill that would allow the government to seize the property of suspected economic criminals who flee overseas and refuse to appear before courts in India, Finance Minister Arun Jaitley said. Being declared a fugitive offender will have many consequences - confiscation of all assets in India. The new law will apply "the moment warrant is issued (and) the court decides the man is not submitting" himself before law, he added.
Besides the Fugitive Economic Offenders Bill, the Government believes that separate regulator of auditing profession NFRA will help track such PNB like frauds in the future. "There will also be the provision to confiscate those assets outside India, but co-operation of that country will also be needed", Jaitley said whle addressing a press conference.
The Bill also proposes setting up of a "Special Court" under the Prevention of Money Laundering Act, which will declare a person a "fugitive economic offender".
- The economic offenders would not be able to stake claim on the properties seized by the Income Tax department or the Enforcement Directorate, even if their yet to be proclaimed guilty by the courts.
Officials said the bill was being dusted off as Punjab National Bank had argued that the attachment of Nirav's stores and their goods, supposedly valued at Rs 5,100 crore, was not helping as the properties could not be auctioned to compensate the bank. New and old cases of persons who have fled the country to avoid prosecution will come under its ambit.
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He said that all their assets, not just the proceeds of crime, would be confiscated and they would be prevented from pursuing civil cases in the country.
"In the last Budget, there was an announcement that the government bring law to confiscate assets of fugitives under economic offences".
He added that under the proposed law the accused will be given a chance to state their case in the high court.
The Cabinet also approved the proposal for establishment of the NFRA and creation of one post of chairperson, three posts of full-time members and one post of secretary.
"The existing civil and criminal provisions in law are not entirely adequate to deal with the severity of the problem" said the government.
The jurisdiction of National Financial Reporting Authority will include investigation of chartered accountants and their firms under Section 132 of the Act and would extend to listed companies and large unlisted public companies. The Central Government can also refer such other entities for investigation where public interest would be involved.