HC stays ED investigation proceedings at Manappuram CEO Nandakumar’s premises

Kochi: In a move that could have serious ramifications for the Enforcement Directorate (ED), the High Court today (May 12) has stayed the investigation proceedings initiated by the ED on the assets of VP Nandakumar, the CEO & and Managing director of Manappuram Finance.

Myfinpoint.com could also learn that the senior Supreme Court advocate Dushyant Dave and the legal firm Menon & Pai represented Nandakumar, who moved the high court seeking the quashing of the investigation proceedings by the ED that commenced on May 3.

The hearing in the case has been kept for May 25. The HC stay will obviously lead to the lifting of the attachment of Nandakumar’s assets valued around Rs2,300 crore including his shares, personal bank accounts and private properties.

It all started on May 03, when ED initiated searches at six premises in Thrissur, Kerala belonging to Manappuram Finance Ltd (MFL) and its Managing Director VP Nandakumar under the Prevention of Money Laundering Act 2002 (PMLA 2002).

In fact, Manappuram share had tanked 12 per cent on the stock market on May 03 following the news on ED raids that spread in the market like wildfire.

Uncalled for raids

Legal experts who talked to myfinpoint.com had vouched on May 3 itself that the ED raids were totally uncalled for and hence the case under PMLA was not sustainable.

“The case led to the ED raids pertains to Rs143.75 crore deposits mobilized and subsequently returned by Manappuam Ago Farms Ltd (MAFL), an entity owned by Nandakumar, more than 10 years ago.

Nandakumar told myfinpoint.com all those deposits had already been returned years ago except Rs9.5 lakh unclaimed deposits that still lie in an escrow account maintained with Punjab National Bank (PNB).

The recent ED raid was on the ground that Nandakumar failed to produce documents and KYC relating to Rs53 crore deposits returned by MAFL, which Nandakumar claims to be available with the respective banks.

Legal experts who talked to this reporter were not convinced about the ED’s observations regarding KYC. It’s reliably learnt that these KYCs were verified by RBI in 2012 itself, and the case was subsequently closed by RBI then.

Moreover, ED could have done its checks on KYC anytime in the past more than 10 years since 2012.

Kerala has witnessed a series of ED raids in the recent months, including reputed business groups such as joyalukkas, BRD Securities Ltd, certain gold manufacturers, leading film stars, etc.