India boosts enforcement powers to tackle corporate fraud

Author: Karry Lai | Published: 7 Jun 2018

India has boosted its anti-money laundering (AML) arsenal by leveraging the Financial Act, 2018 to address certain procedural difficulties faced by the enforcement directorate (ED) in the prosecution of cases under the Prevention of Anti-Money Laundering Act, 2002 (PMLA).

The absence of provisions relating to proceeds of crime and recent cases of corporate fraud involving huge sums have driven this legislative amendment. The amendments have changed the handling of proceeds from an instance of corporate fraud to a money laundering offence. This gives the ED the power to attach and confiscate property determined to be proceeds of crime and enable authorities to prevent the dissipation of proceeds from corporate fraud.

The alleged $2 billion scam involved jewellers who defrauded the bank by colluding with two of the bank’s staff

As a result of the amendment, it is possible that bona fide directors are exposed to investigation and prosecution due...