Under FEMA
While the raids were conducted under the provisions of the Foreign Exchange Management Act (FEMA), 1999, the ED’s claims of alleged bribery and the recovery of documents purportedly showing the routing of money through “unauthorised channels” to foreign shores are expected to spell more trouble for the Minister. These allegations are likely to lead to fresh cases against the Minister under the Prevention of Corruption Act, 1988, and the Prevention of Money Laundering Act, 2002.The ED claimed to have recovered documents showing that Mr. Satish Jarkiholi has interests in gold mining in Congo and that his family members have interests in multiple mining companies in Congo and Zambia.
The alleged bribery is expected to trigger yet another political storm, with the Opposition BJP already buoyed after forcing another Minister, B. Nagendra, who is facing corruption allegations and an ED chargesheet, to resign.
Bribery allegations
Significantly, the ED said the raids on the Minister and his associates also covered those linked to private company Bharat Vanijya Eastern Private Ltd. (BVEPL) over allegations that the company had paid huge bribes in return for securing a PWD tender, and that the money was allegedly used to acquire foreign assets, according to a statement issued by the agency on Friday, a day after the searches concluded.“The searches also revealed evidence related to irregularities in the PWD and several incriminating materials/documents, including digital devices, related to the collection of bribe money from contractors such as BVEPL, in the entities and accounts of various influential persons, including entities controlled and managed by Y.D. Manjunath, the brother-in-law of Mr. Satish Jarkiholi,” the ED claimed.
Y.D. Manjunath, a senior official in the Karnataka Excise Department, was recently raided by the ED in an unrelated case.
Alleged FEMA violations
The ED said it conducted searches at 21 premises in Bengaluru, Belagavi, Gokak and Kolkata under the provisions of the FEMA, 1999, “to investigate and ascertain the Jarkiholi family’s alleged undisclosed overseas investments, cross-border business links, and suspected financial irregularities”.“It was found that kin and family members of Satish Jarkiholi, namely his daughter Priyanka Jarkiholi, son Rahul Jarkiholi and sister Mahadevi Manjunath, who is also the wife of Y.D. Manjunath, have acquired shareholding in multiple foreign entities, including Eldorado Mining Resources, Congo, and Nava Aurum Mining Ltd., Zambia. It was also revealed that Satish Jarkiholi has acquired nearly 40% stake in Magnitude Star SARL, Congo, which is engaged in gold mining. Documents relating to various other foreign entities owning mining assets in Africa were also found and seized,” the ED claimed.
The ED also claimed to have gathered evidence indicating that a “huge amount of investment/expenditure was made in cash” in an entity in Congo through “unauthorised channels”.