Court orders confiscation of Rs 128-crore assets in UP's first FEOA case

Lucknow, Dec 4 (PTI) A special court here on Thursday ordered confiscation of assets worth about Rs 128 crore as part of the fugitive economic offender proceedings undertaken by the ED against Uttar Pradesh-based Shine City Group and its fugitive promoter Rashid Naseem accused of duping investors.

The court issued the order under the provisions of the Fugitive Economic Offenders Act (FEOA) of 2018, officials said. This is the first confiscation through the FEOA mechanism in Uttar Pradesh.

Movable and immovable assets worth Rs 127.98 crore, attached earlier by the Enforcement Directorate under the anti-money laundering law, will be confiscated, the officials said.

Naseem was declared a fugitive economic offender (FEO) by the court in April.

"The property confiscated under FEOA now stands vested in the Central Government and thus provides a direct route for compensating victims through the realization of the confiscated properties," the ED said.

Earlier, the court issued a proclamation after the ED moved a plea before it for restitution or restoration of the assets to the victims and following this, about 6,500 victims of the alleged investment fraud perpetrated by the Shine City Group have submitted their claims, the officials said.

However, the Shine City Group has challenged the restitution proceedings by filing a special leave petition (SLP) before the Supreme Court.

The FEOA is aimed to bring to justice those people who have left India to evade the clutches of law after committing fraud with a benchmark value of at least Rs 100 crore.

The probe relates to a Prevention of Money Laundering Act (PMLA) case initiated after the ED took cognisance of as many as 554 FIRs registered by the Uttar Pradesh Police against Naseem and the Lucknow-based Shine City Group of companies.

"The FIRs alleged large-scale fraud wherein public funds of Rs 800-“Rs 1,000 crore were collected through fraudulent real estate schemes and multi-level marketing with promises of high returns. The investors were ultimately cheated," the ED said.

According to the agency, Naseem "deliberately" evaded the investigation and failed to appear despite issuance of summons, and ultimately absconded from India via Nepal and is currently residing in Dubai, UAE.

The ED had used digital evidence of Zoom meetings being held by Naseem from the UAE to convince the court that he was "wilfully" evading the law as well as money laundering and FEOA proceedings, the officials said.

With the help of the Zoom platform and technical reports, the IP addresses used during the meetings were geo-located to the UAE, establishing his presence in Dubai, the officials said.

The agency has arrested eight people and filed six chargesheets in the case. PTI NES KVK KVK