SAFEMA tribunal upholds ED attachment of Koneru Pradeep’s London insurance policy
HYDERABAD: The Appellate Tribunal under the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act (SAFEMA) has upheld the Enforcement Directorate’s attachment of a London-based insurance policy belonging to industrialist Koneru Pradeep, son of Koneru Rajendra Prasad, in the money-laundering case linked to the Emaar Hills township project, as reported by TOI.
In an order dated August 11, the SAFEMA member dismissed Pradeep’s appeal and upheld the adjudicating authority’s May 25, 2022, order confirming the attachment of a Scottish Provident International, London, insurance policy.
The policy, described as a Momentum Single Life policy, has a maturity value of $250,000 and a surrender value of about $120,000.
Pradeep argued that he bought the policy on July 3, 1998, several years before the alleged Emaar-linked transactions between 2005 and 2010. He said his elder brother, Madhu Koneru, paid the premiums as a gift using legitimate business funds from Rescom Holdings, formerly known as Trimex International FZE.
He also cited a Telangana High Court order that quashed the money-laundering proceedings against Madhu Koneru.
ED said premium payments continued until 2014
The Enforcement Directorate said that although Pradeep bought the policy in 1998, premium payments continued until 2014.
The agency alleged that proceeds from the Emaar transactions moved through offshore entities before reaching Madhu Koneru. It said Madhu then used the funds to pay the insurance premiums.
ED argued that money laundering is a continuing offence. Therefore, it said, authorities could examine premium payments made during the relevant period, regardless of when Pradeep purchased the policy.
The agency also argued that the relief granted to Madhu Koneru did not change the alleged criminal origin of the funds. It pointed out that Pradeep continues to face trial before the special court.
Tribunal accepts ED’s argument on proceeds of crime
Pradeep also argued that ED had already attached assets equivalent to the identified proceeds of crime, estimated at about ₹167 crore, through earlier attachment orders.
He contended that attaching additional assets exceeded the quantified proceeds of crime. He also alleged that the adjudicating authority had failed to apply its mind properly.
ED countered that the case involved large amounts of unaccounted cash. The agency said authorities could not rigidly fix the maximum amount of proceeds of crime based only on the amounts detected at a particular stage.
The tribunal accepted ED’s contentions and dismissed Pradeep’s appeal. It consequently upheld the attachment of the insurance policy.
