The Lok Sabha has approved two key amendments in the Prevention of Money Laundering Act, 2002 (PMLA), through the Finance Bill, to provide relief to investors hit by Ponzi schemes.
“The two changes are: certain tax offences, both direct and indirect, have been made predicate offences, and there is a provision for restitution of assets. These become very important in the context of Ponzi schemes,” Revenue Secretary Shaktikanta Das said while addressing the Foundation Day celebration of the Enforcement Directorate here on Friday. A predicate offence is the underlying criminal activity giving rise to proceeds that may become the subject of a money laundering offence.
Restitution means returning property or the monetary value of loss to the proper owner. Sometimes restitution is made part of a judgment in negligence and/or contracts in criminal cases.
One of the penalties imposed requires the return of stolen goods to the victim or payment to the victim for harm caused.
Countries such as Switzerland have a specific law that allows for the seizure of assets of persons accused of obtaining such assets in other countries (including state coffers) through unlawful means.
These amendments are part of the Finance Bill approved by the Lok Sabha on Thursday.
Protecting investors Das said the provision for restitution is meant for a large number of innocent investors “who get carried away by such publicity about handsome returns and lose money”.
He also said that guidelines and rules for the entire procedure will be spelt out in due course and that restitution has to be done under court supervision.
The Revenue Secretary’s remarks come at a time when an investigation is on into the Saradha scam. Thousands of people, especially those living in the rural areas of West Bengal, have lost crores of rupees. There are similar instances in other States, too.
Earlier this week, CBI Director Anil K Sinha had said over ₹80,000 crore of public money pertaining to roughly six crore citizens is locked up in Ponzi schemes being investigated by the agency.