Atul Punj: Did He Commit Fraud and Money Laundering?

Atul Punj
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File Photo: Atul Punj

Indian businessman Atul Punj serves as Punj Lloyd’s chairman and managing director.

Atul Punj earned a Bachelor of Commerce from the Shri Ram College of Commerce at the University of Delhi in 1979.

Atul Punj Booked for Cheating

Based on a complaint from a local business, M/S Harbhej Engineering Works Pvt, Ltd, Goindwal Sahib, the police have filed an FIR against Atul Punj, chairman-cum-managing director of M/S Punj Lloyd Ltd (PLL), Gurgaon, and others for fraud and breach of trust.

Over ten years ago, M/S Punj Lloyd Ltd was awarded the lucrative Goindwal Sahib Thermal Plant project. The business gave M/S Harbhej Engineering Works Pvt. a portion of the project.

The accused allegedly held onto a crane worth Rs 2 crore for two years even after the task was over, according to the complainant, Harbhej Singh, director of M/S Harbhej Engineering Works Pvt. He claimed that the crane cost Rs. 4.5 lacks in rent per month.

Further inquiry, according to the investigating officer, Sub-Inspector Kewal Singh, is ongoing. An incident has been reported. 

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The Delhi High Court declines to revoke the LOC against businessman Atul Punj

To allow Punj Llyod promoter Atul Punj to go abroad, the Delhi High Court declined to postpone a Look Out Circular (LOC) issued against him on Thursday. The court cited the fact that the probe into him under the black money law was still in its early stages.

The court refused his appeal for the suspension of the LOC after noting that Atul Punj is accused of siphoning off large sums of money and was dodging questions while his kid was abroad and refusing to cooperate.

Justice Yogesh Khanna stated, “The discretion needs to be exercised cautiously more so when the petitioner’s son has not returned to India for the last two years and is not cooperating. The petitioner is allegedly evading questions and has promised to give answers only on 09.12.2022. Millions have been transferred by him to foreign accounts per investigation to date.   I am therefore hesitant to suspend the LOC at this time given the claims of massive money theft and the fact that the inquiry under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, is still in its early stages. As a result, the court dismissed the petition.

The Supreme Court has taken judicial notice of the millions of crores of Indian rupees that are hidden away abroad in foreign bank accounts, posing a major threat to the financial stability and economy of the nation, the court stated in its 8-page ruling.

To travel for a set amount of time to Abu Dhabi, Bahrain, Riyadh, and London for business-related consulting work, the petitioner asked that any LOC imposed against him be suspended.

The petitioner was under investigation by the income tax department and other agencies, and the court was informed that a LOC had been launched against him because he posed a flight risk and should not be allowed to go overseas in the interest of the general public.

The Serious Fraud Investigation Office disclosed before the court that it was looking into allegations that the petitioner’s company defrauded banks of about Rs. 12,300 crore. The petitioner allegedly refused to cooperate with the investigation, provided evasive answers, and shied away from taking responsibility.

The petitioner was the beneficial owner of undeclared assets abroad, according to the income tax department’s findings, and as such, was subject to penalties under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, including Criminal prosecution.

Engineering, procurement, and construction firm Punj Lloyd of Atul Punj offers services in the infrastructure lacks, defense, and energy industries. 

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Atul Punj has received serious allegations of committing financial crimes

How Men Like Atul Punj Stole Rs. 1.36 Trillion from India

The Reserve Bank of India (RBI) defines willful defaulters as people who intentionally avoid paying back loans despite being able to.

Over the past ten years, the debt that willful defaulters have incurred to Indian banks has increased more than ten-fold, from Rs 23,000 crore on March 31, 2012, to Rs 2.4 lakh crore on May 31, this year.

The defaults had climbed dramatically during the lockdown to reach Rs 2.6 lakh crore in March 2021, according to data from TransUnion Cibil, a credit-information company, but had since started to decline slightly.

The information only applies to accounts where wilful defaulters have been sued and have debts of at least Rs. 25 lahks outstanding. There were almost 12,000 such defaults as of May 31.

The amount of Rs 2.4 lakh crore is nearly twice as much as the Rs 1.4 lakh crore allocated to the rural development ministry, which funds the rural jobs program under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) and is 2.7 times the allocation of Rs 86,200 crore to the health ministry.

According to a study of the funds in these 12,000 accounts, barely over 1% of all defaults are attributable to loans under Rs 1 crore, such as those obtained by property buyers. On the other hand, more than 250 organizations together missed payments totaling more than Rs 100 crore, resulting in a default of Rs 1.36 lakh crore, or 58% of the total intentional defaults.

What is Money Laundering?

Money laundering is an illegal process that involves concealing the origin of illegally obtained funds and transforming them into legitimate sources of income. This is done to evade prosecution, conviction, and the seizure of criminal proceeds.

The majority of middle-class people cannot intuitively understand sums like Rs 100 crore. So, here’s one way you could consider it. It would take 1,000 years to save Rs. 10 lakh if you were able to save that much on a yearly basis. This money would earn Rs. 1.15 crore, or Rs. 9.6 lakh per month, in annual interest if it were placed in a Swiss long-term bond (10 years or longer). It can purchase 190kg of gold or 200 apartments at Rs. 50 lakh apiece, both of which can be passed down through the generations.

Have money but won’t pay (What Indian Financial Regulator Says on People Like Atul Punj)

The Reserve Bank of India (RBI) defines wilful defaulters as people who intentionally avoid paying back loans despite being able to. This category also includes entities who use the money for things other than what the loan was intended for. Companies who steal money but are unable to produce the stolen money or the assets they were supposed to use it to generate are also considered wilful defaulters.

We combined the debts owed by individuals or businesses that defaulted on at least one account totaling Rs 100 crore or more. A consolidation of this sort reveals that the ABG Group, which is supported by Rishi Agarwal and others, comes out on top. The corporation has intentionally defaulted on seven loan accounts in various banks totaling Rs 6,382 crore.

Atul Punj’s case is one of the many cases of shady financial dealings in India.

With wilful defaults totaling Rs 5,885 crore, Arvind Dham-promoted Amtek Auto and its subsidiaries come in second.

Third place goes to brothers Nitin and Chetan Sandesara, who has been hiding out for a while now and whose company, Sterling Global Oil Resources, and its subsidiaries have a combined default of Rs 3,757 crore.

Dewan Housing Finance and its subsidiaries, owned by Kapil and Dheeraj Wadhawan, have willfully defaulted on loans totaling Rs 2,780 crore.

Sanjay and Sandeep Jhunjhunwala, whose company Rei Agro has defaulted on Rs 2,602 crore in bank loans, are the next on the list.

Mehul Choksi’s Gitanjali Gems, Sanjay Kumar Sureka’s Concast Steel and Power, Atul Punj‘s Punj Lloyd, and Jatin Mehta’s Winsome Diamonds and affiliates are further businesses that have defaulted on bank loans totaling more than Rs 2,000 crore. Mehta and Choksi have taken refuge on the Caribbean islands.

In total, nine companies have missed loan payments totaling more than Rs 2,000 crore. For the following seven, defaults will range between Rs 1,500 crore and Rs 2,000 crore.

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Atul Punj has faced allegations of money laundering

Switzerland sent notices to Atul Punj, Gautam Khaitan, and Agarwal Family Trust over their trusts in tax havens.

The Swiss authorities are in the process of disclosing the banking information of several people who are accused of dodging taxes in India before moving overseas.

According to letters sent to those businesses, several trusts established in foreign tax havens employing a complicated web of entities have come under the scrutiny of Indian and Swiss authorities for possible tax evasion by stashing illegal funds in banks in Switzerland.

Additionally, some people who are believed to have evaded taxes in India before moving overseas are being investigated, and the Swiss authorities are currently sharing their banking information with their Indian counterparts.

These people, including some businessmen, as well as trusts based in the Cayman Islands and companies, have been asked to designate their nominees if they wish to appeal against the sharing of their banking information with India, according to notices published in Switzerland’s federal gazette over the previous month.

Trusts, particularly those established in nations like the Cayman Islands, Panama, and British Virgin Islands, have frequently been viewed as means of tax evasion.

Businessman Atul Punj, Gautam Khaitan, Satish Kalra, Vinod Kumar Khanna, Dullabhbhai Kunverji Vaghela, Revaben Dullabhai Kunverji Vaghela, and Balwantkumar Dullababhai Vaghela are among those listed in these notices.

In other instances, it is alleged that the people identified in the notices have passed away and that their heirs are being requested to react to the notices. The P Devi Children’s Trust, The P Devi Trust, The Dinod Trust, and The Agarwal Family Trust are among the Cayman Islands-based trusts mentioned in these warnings.

Atul Punj isn’t the only Indian businessman facing such legal proceedings.

Similar warnings have also been published under the names of, among others, India-based Aadhi Enterprises Pvt Limited and Cayman-based Devi Limited.

It is believed that some of these organizations were utilized by politicians as a means of stashing their illicit income, notably through the employment of vehicles related to the real estate, gem and jewelry, and financial services industries.

These notices depart from the automatic sharing of information system that has been in place between India and Switzerland since last year and were sent in response to India’s request for “administrative assistance” in the relevant investigations into each of the cases. In September 2019, the first batch of data provided as part of the automatic exchange was made available. This was followed by a yearly exercise in September.

It’s possible that some of the accounts being handled by the “administrative assistance,” which can only be used after the submission of prima facie proof of wrongdoings, were closed before 2018, the deadline for the automated exchange.

According to Swiss legislation regarding the sharing of financial information in tax situations, the issuance of notices is often the initial step towards information sharing by Swiss authorities with the asking jurisdiction.

Except for the noticees’ names and birthdates (or dates of incorporation in the case of corporations or trusts), not much else is disclosed in these notices.

Many of these individuals first denied any wrongdoing once some of their names appeared in leaked lists like the HSBC and the Panama Papers, but Indian officials quickly began their investigations afterward.

When the Swiss authorities receive requests accompanied by preliminary evidence of financial wrongdoings, such as the concealment of allegedly illicit funds, they often issue such letters to Indian residents who have accounts with Swiss institutions.

More than 100 of these notices, including those against individuals already under investigation for black money in India, have been issued in recent months. Similar letters have previously been issued in the cases of Gautam Khaitan, a suspect in the AgustaWestland helicopter scam, and the Chennai-based real estate company Aadhi Enterprises.

While Swiss bank accounts have been the subject of contentious political debate in India for many years due to suspicions that they were being used to stockpile black money, it has also been suspected that individuals connected to the former princely states had hidden some money in Swiss banks.

Since 2015, the Swiss government has also been disclosing information about dormant accounts to enable their claimants to provide the requisite documentation in order to have access to those funds, including at least 10 accounts connected to Indians.

Some of these accounts were connected to inhabitants and citizens of India who lived during British rule. According to statistics kept by the Swiss authorities, not a single inactive account associated with an Indian has been successfully claimed in the previous six years.

When the list was first made public in December 2015, it had around 2,600 dormant accounts with a combined balance of over Rs 300 crore (about 45 million Swiss francs). When the list was first made public, there were also almost 80 unclaimed safety deposit boxes that were open to claims from the true owners or their heirs.

Since then, more accounts have been added each year when they go dormant due to Swiss banking regulations. There are now about 3,500 accounts on the list.

Requests must be made within one year after the day that such inactive accounts were made public, however, accounts with the last customer contact in 1954 or before have been given a longer time period of five years.

Both the original account owner and his or her legal heirs may lodge claims. In the event that no request is submitted by the deadline, or the bank determines that the claims are unfounded, the bank is required to turn over the assets to the Federal Finance Administration of Switzerland, rendering all rights of former clients void.

Atul Punj: Conclusion

Certainly, Atul Punj is involved in some shady deals. The various legal proceedings underway against Atul Punj indicate that he might not be as reliable as he claims to be.

What do you think?

Is Atul Punj an honest professional or a dangerous criminal?

Share your thoughts on Atul Punj in the comment section below.

Atul Punj: Did He Commit Fraud and Money Laundering?
Atul Punj: Did He Commit Fraud and Money Laundering?

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