Finance Minister Arun Jaitley. (Express Photo/Praveen Jain/File) Finance Minister Arun Jaitley. (Express Photo/Praveen Jain/File)

THE UNION Cabinet on Thursday approved the Fugitive Economic Offenders Bill that seeks to confiscate and sell all assets of absconding economic offenders.

Once it is voted into law, the proposed legislation will empower investigating agencies to confiscate, and vest with themselves, any property of the absconding offenders without encumbrances, and will apply to cases where proceeds of the crime are above Rs 100 crore.

The government also decided to set up a National Financial Reporting Authority (NFRA) to frame rules governing the conduct of chartered accountants and auditors. The NFRA will have jurisdiction over listed companies and “large unlisted” companies, while the Institute of Chartered Accountants of India will continue to oversee the remaining companies. The government will frame the rules that will define the threshold for companies to be supervised by the NFRA, which will have a chairman and a total of 15 members.

Briefing reporters on the Cabinet’s decisions, Finance Minister Arun Jaitley said the Fugitive Economic Offenders Bill will include a list of scheduled offences. If any individual who has committed a scheduled offence and against whom an arrest warrant has been issued by a competent court leaves the country, refuses to return to face criminal prosecution, he will be termed as a fugitive economic offender.

The proposed Bill, which will be tabled in the second leg of the Budget Session of Parliament, empowers the government to “confiscate all of a fugitive offender’s assets in India, including benami assets”. Such a person will also be barred from pursuing any “civil claims” in the country — officials said this move would discourage such persons from defrauding banks and leaving the country.

Jaitley said the Bill also has provision for confiscation of overseas assets, but this will require cooperation and “appropriate arrangements” with overseas nations. “We will try and make sure that this is passed as fast, as expeditiously as possible (by Parliament) because we can’t allow people to make a mockery of the law, that you first indulge in loot and then refuse to submit to the jurisdiction of our legal system, and I think we have a very responsible Parliament,” said Jaitley, when asked whether the proposed law would be passed in the Budget Session. This law will apply to all cases — old and new, he said.

The proposed law aims to bring to book offenders who have failed to pay back huge bank loans, and refused to return to the country to face legal action.

The country’s second-largest state-owned lender, Punjab National Bank, recently reported fraudulent transactions of about Rs 11,400 crore at its mid corporate branch in Mumbai, and said “based on these transactions, other banks appear to have advanced money to these customers abroad.”

The extent of these fraudulent transactions, allegedly done by Nirav Modi, Mehul Choksi and their companies, was revised upward to Rs 12,636 crore following fresh information from the bank on Tuesday. Modi and Choksi left the country a few weeks before the fraud came to light.

Industrialist Vijay Mallya, who has been recognised as a wilful defaulter with outstanding loans of Rs 8,191 crore to public sector banks as on December 31, 2016, has also left the country.

“The Bill is expected to re-establish the rule of law with respect to the fugitive economic offenders as they would be forced to return to India to face trial for scheduled offences. This would also help banks and other financial institutions to achieve higher recovery from financial defaults committed by such fugitive economic offenders, improving the financial health of such institutions,” the government said in a statement.

In the Budget 2017-18, Jaitley had announced that the government was considering introducing legislative changes or even a new law to confiscate the assets of such absconders till they submit to the jurisdiction of the appropriate legal forum. “If at any point of time in the course of the proceeding prior to the declaration, however, the alleged fugitive economic offender returns to India and submits to the appropriate jurisdictional court, proceedings under the proposed Act would cease by law,” the government said.

The Cabinet also approved the proposal for establishment of the NFRA and creation of one post of chairperson, three posts of full-time members and one post of secretary. The Authority, which can have a maximum of 15 members, will be an independent regulator for the auditing profession.

“The jurisdiction of NFRA for investigation of chartered accountants and their firms under Section 132 of the Act would extend to listed companies and large unlisted public companies, the thresholds for which shall be prescribed in the Rules. The central government can also refer such other entities for investigation where public interest would be involved,” the government said in a separate statement.

📣 The Indian Express is now on Telegram. Click here to join our channel (@indianexpress) and stay updated with the latest headlines

For all the latest India News, download Indian Express App.