ED approaches HC against order in favour of textile chain

The Directorate of Enforcement (ED) has approached the Madras High Court against an order passed by the Appellate Tribunal for Prevention of Money Laundering Act of 2002 in favour of popular textile retail chain Pothys and its owners with respect to purchase of a property for their showroom in Kancheepuram.

When the appeal was listed for admission before Justices M.M. Sundresh and M. Nirmal Kumar on Monday, it was represented that Pothys too had preferred an appeal challenging the tribunal’s direction to deposit ₹6.47 crore as security amount. Hence, the judges decided to hear the appeals together on August 12. During the course of the hearing on Monday, Additional Solicitor General G. Rajagopalan, assisted by Special Public Prosecutor for ED cases G. Hema, told the court that investigations had revealed that owners of Pothys had purchased certain properties despite knowing that they had been acquired by the vendors through ill-gotten wealth.

Money laundering

Pothys had actually purchased around 78,000 square feet of land in Kancheepuram town. However, the property in question in the present proceedings was only 12,694 square feet which provides passage from the main road to the showroom. According to the ED, the passage property belonged to notorious criminal Sridhar Dhanapal. It was alleged that he had used the proceeds of his crimes to purchase properties in the names of his wife and daughter. Though Pothys owners had purchased the property from his daughter, the sale consideration had been paid into the bank account of her mother and this according to the prosecution raised suspicion regarding money laundering.

Hence, the ED attached the property provisionally in September 2016 and the attachment order was also confirmed by Adjudicating Authority under PMLA forcing the Managing Director Ramesh Pothy to approach the appellate tribunal which allowed the appeal in favour of the textile chain but directed it to deposit ₹6.47 crore subject to result of the prosecution.

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Printable version | Jun 3, 2020 6:19:48 PM |

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