Mumbai court orders confiscation of properties worth Rs 300 cr of City Limousine chairman
The ED is probing a case under Prevention of Money Laundering Act against City Limousine and its chairman Sayed Mohamed Masood for running an alleged ponzi scheme
A special Prevention of Money Laundering Act (PMLA) court in Mumbai has ordered confiscation of properties worth $40 million (Rs 300 crore) held in Singapore in two foreign bank accounts of City Limousine Ltd’s chairman Sayed Mohamed Masood who is facing charges of money laundering in India for duping small investors through a ponzi scheme a decade ago.
“On request of ED, Singapore Authorities had restrained the funds held in the foreign bank accounts of companies pertaining to Sayed Masood. Thereafter, ED moved an application before Special PMLA Court requesting for confiscation of the foreign bank accounts. PMLA Court under section 8(7) of PMLA ordered confiscation these funds. On the strength of this Court order, ED will move to the appropriate authority of foreign jurisdiction for repatriation of these fund to India,” said the ED in a statement.
The ED is probing a case under PMLA against City Limousine and Masood for running an alleged ponzi scheme. It is alleged that two City Group companies, City Limousine and City Realcom, collected over Rs 700 crore from 70000 investors across the country by floating car rental schemes and promising unrealistic returns of upto 48 percent on investments. In 2009, the companies defaulted on payment to investors, and more than 42,000 cheques issued by it to investors were dishonoured.
“Investigations revealed that companies of Masood had received an amount of about Rs 400 crore in the garb of advance against exports of diamond from entities located at UAE, Hong Kong and Singapore. However, no export of diamond was actually done and those entities were compensated by refund of amounts or supplied diamonds locally from UAE through some other persons at the behest of Masood and not through legal banking channel,” said ED.
The ED has also found that Masood opened several “entities/ companies/ trusts/bank accounts abroad without any requisite statutory permission” in violations of laws. These entities , the ED said served as special purpose vehicles to “launder the proceeds of his criminal activity of cheating more than 70,000 investors of Rs 700 crore”.
The agency has so far filed five prosecution complaints in the case against Masood. It has also attached domestic assets worth Rs 129 crore of Masood and his companies. Masood is currently in jail.
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