NEW DELHI: In a landmark judgement, the Chhattisgarh High Court allowed the Enforcement Directorate (ED) to liquidate frozen assets amounting to ₹423-crore to protect their financial value.
Following the attachment of assets, which included shares and market-linked securities by the Enforcement Directorate (ED) during the investigation into the alleged Madhav Online Book money laundering case, multiple companies filed a writ petition. They challenged the move, citing market volatility that could diminish the assets’ value while proceedings under the Prevention of Money Laundering Act (PMLA), 2002.
“The petitioners shall submit before the ED a detailed proposal indicating the securities/shares sought to be liquidated, the proposed mode of liquidation and the nature of the SEBI-regulated investment instruments in which the sale proceeds are proposed to be invested,” said Justice Ravindra Kumar Agrawal.
The court asked the firms to submit a proposal to the ED detailing how the frozen securities could be liquidated, and the proceeds be reinvested to safeguard the assets’ baseline value, prioritising the preservation of economic value amid legal proceedings.
In the verdict, the court said that after ED is satisfied that “liquidation of any part or whole of the frozen securities is necessary or desirable for preservation of the value of the assets, it may permit liquidation of such securities” strictly under its supervision and control and through a SEBI-registered intermediary.
The court observed that leaving listed shares and market-linked investments frozen indefinitely exposes them to severe market volatility.
Counsels Vijay Agrawal and Ashish Mittal arguing on behalf of the petitioners, said that the aim of asset attachment under the PMLA is to preserve the property’s value.
In February 2024, the ED froze the demat accounts and investment portfolios of eight companies. The matter involves securities and investments held by companies including Dream Achiever Consultancy Services, Discovery Buildcon, Forest Vincom, Brilliant Investments Consultants, Ability Ventures, and Savarnbhumi Vanijya.
