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The Allahabad high court on Friday directed the Enforcement Directorate to investigate charges of money laundering against Rajya Sabha Member of Parliament Amar Singh, saying that the matter needed a thorough probe as it had "national ramifications".
The order came as a response to a writ petition moved by Singh against the serious charges levelled against him by Lucknow-based advocate Shiva Kant Tripathi.
Tripathi had alleged that the politician was involved in a Rs 500 crore fraud through amalgamation of shell companies.
The case was registered under the provisions of the Money Laundering Act, the Prevention of Corruption Act and other related provisions of the Indian Penal Code.
"The FIR accused Amar Singh of forming a never ending chain through a web of companies with complex cross holdings coupled with amalgamations which helped in erasing the trail. It was not only an attempt at converting black money into legitimate money but involved appropriating outlandish sums of money that could not have been legitimately earned by him through his known and admitted sources of income," senior advocate Gopal Chaturvedi told this correspondent.
The FIR accused Singh of these misdoings in 2003, when he was the chairman of the Uttar Pradesh Development Council and held a cabinet minister's rank and status. He was accused of misusing his position to award various government contracts worth thousands of crores to companies owned and controlled directly or indirectly by him, besides making underhand money through kick-backs.
The second part of the allegation was that the petitioner indulged in money laundering by creating a web of shell companies. It was alleged that the major share holders of M/s Pankaja Arts and Credit Private Limited and M/s Sarvottam Caps Limited were Amar Singh's wife, Pankaja Singh and actor Amtabh Bachchan, his close family friend.
As many as 41 companies floated by Amar Singh were merged with M/S Pankaja Arts and Credit Private Limited and M/S Sarvottam Caps Limited by the orders of the Kolkata high court. These were stated to be shell companies with little or no business.
According to Tripathi's second counsel Samit Gopal, "The amalgamation process was apparently a deception and by this process the companies in which the petitioner had controlling shares were overnight enriched by more than Rs 400 crore."
Senior counsel Ram Jethmalani, appearing on behalf of Amar Singh, argued that the merger of companies could not be questioned as it was duly approved by the Kolkata high court..
Jethmalani also alleged that the FIR was "politically motivated with the intent of tarnishing the image of the politician."
But the bench comprising Justice Imtiaz Murtaza and Justice S S Tiwari turned down Singh's plea and ordered a probe into the allegations by the Enforcement Directorate.