Fugitive Economic Offenders Bill Approved By The Cabinet

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Fugitive Economic Offenders Bill Approved By The Cabinet
Fugitive Economic Offenders Bill Approved By The Cabinet

India’s cabinet has given its nod to a draft law that allows the government to take over all assets of loan defaulters and financial offenders who flee the country to evade criminal prosecution in cases where total claims are more than Rs 100 crore.

The cabinet approved the draft of the Fugitive Economic Offenders Bill in its meeting today, Finance Minister Arun Jaitley said in a media briefing. The law, if passed in Parliament, will allow the confiscation of all the assets owned in India by the economic offenders. These will also include benami assets or those held by proxies.

The government’s move comes after a near Rs 12,700 crore fraud was unearthed at state-run Punjab National Bank where companies linked to billionaire jeweller Nirav Modi allegedly obtained fraudulent credit guarantees to borrow short-term loans from foreign banks. Modi had left India before the crackdown began.

The case is being equated with Vijay Mallya, the former chairman of defunct Kingfisher Airlines, who India wants extradited from the U.K. in a loan default case.

“There was a need for a legislation like this because of the widespread belief that people who breach the law then evade the process and get away,” Sidharth Luthra, senior advocate at the Supreme Court, told BloombergQuint in an interaction.

“The time taken and the cost to get them back hurt the exchequer and the Indian taxpayer. It becomes a bit of a mockery that they are sitting outside with funds taken out of India.”

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