Fugitive Economic Offenders Bill cleared: What it means for absconders like Nirav Modi, Vijay Mallya
The Union cabinet on March 1 approved the Fugitive Economic Offenders Bill, 2018. It will allow confiscating assets without conviction in cases where economic offenders flee the country, and paying the lenders by selling off the fugitive’s properties. Such people will be tried under the Prevention of Money Laundering Act. The law, which will be applicable in cases where the value of offence is more than Rs 100 crore, will cover any kind of economic offence.
That it took Nirav Modi and Mehul Choksi to jump ship and the Rotomac owner to get arrested on charges of default for the bill to get approved is a bit scary, to say the least. That a government which came to power on the promise of fighting corruption took so long to seal a legal loophole is certainly worrying. However, it is an initiative that should be welcomed.
The bill proposes to define a fugitive offender, confiscation of all assets in India followed by confiscation of overseas assets, subject to cooperation of those countries, debarring the offender to pursue any civil claim in the country. The challenge will still be to get the offenders back.
Most of the legal moves against economic offenders automatically assume that they would remain in the country. Laws like Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, the Recovery of Debts Due to Banks and Financial Institutions Act, and the Insolvency and Bankruptcy Code, cannot do much if the accused persons flee the country.
Coordinating with foreign agencies have not been our strong point. There is still the question of overvaluing assets offered as loan guarantees, as we have seen in the Vijay Mallya case. Without getting into the debate whether the assets were overvalued wilfully or were inadvertent mistakes, this is another area that needs some legislative cover.
While we brace for a potentially stormy second half of the Budget session there are some talks that the Fugitive Economic Offenders Bill 2018 may take the ordnance route. The PNB's ever-growing scam and issues like the arrest of Karti Chidambaram are expected to lead to a stormy session in both the Houses.
The grapevine in the corridors of power tells us that the government is keen to fast-forward the Economic Offenders Bill too. How the government goes about it and include existing cases in its ambit remains to be seen.
Will the Opposition extend its support in passing the bill? Or will it be blocked by proposing technical amendments in sub-clauses?
It is not as if economic offenders and defaulters are shifting base overseas since PM Modi's government came to power, they were always there.
So what stopped the Congress-led UPA from pushing through similar legislations?