By Jayant M. Thakur, Chartered Accountant
BACKGROUNDHardly a week (or less) goes by when we read/hear news about cases being launched under the Prevention of Money-Laundering Act, 2002 (“the Act”) on company promoters/executives, politicians, celebrities, apart from various other groups. Arrests often accompany these. The dreaded Enforcement Directorate (ED) is seen as the lead organisation carrying out such action. This may rightly be seen as strange. It may appear that serious crimes that were seen to be covered by this Act may have been happening regularly, and this does not match with one’s understanding of events generally or even in the specific case if one reads the news report in detail.
More particularly, in the context of the topic of this feature, the situation sounds very surprising since action under this Act is taken for insider trading, stock market price manipulation, corporate frauds, etc. This is in parallel and in addition to the action that SEBI may have initiated.
As one would remember, and this is written right in the preamble of this Act, this law has been enacted pursuant to the fact that our country is part of the UN Political Declaration on this matter. Furthermore, the core focus of this declaration is use of anti-money laundering laws to tackle drug trafficking. This has been extended to money laundering relating to terrorism, armed action against the state and similar very serious and heinous acts. Considering the
