Supreme Court Revokes Bail in Chinese Investment App Money Laundering Case
The case relates to alleged laundering of proceeds from fake Chinese-pegged investment apps.
The Supreme Court on Tuesday set aside the bail granted to Bhupesh Arora and dismissed the bail plea of his accomplice Rohit Vij in a money laundering case connected to a probe into alleged Chinese-pegged fake investment apps.
“We agree with the submissions made by learned counsel for ED that settlement in the predicate offence would not extinguish the basic criminal conduct,” observed a Bench of Justices MM Sundresh and Prasanna B Varale.
The Court was considering the Enforcement Directorate’ (ED) plea against the bail granted to Arora by the Delhi High Court and Vij’s plea against the separate Delhi High Court order refusing to grant him bail.
The case stemmed from an ED investigation into an alleged cyber fraud and money laundering ring running through the LOXAM investment app. Through this app, it is alleged that several persons were persuaded to make investments based on promises of high returns.
The ED initiated its probe under the Prevention of Money Laundering Act (PMLA), based on a prosecution case registered by the Hyderabad Cyber Crime Police in this regard. The complainant in the predicate case had stated that he was cheated of ₹1.16 lakh through the app.
According to the ED investigation, the money collected through this fraudulent promise was deposited into several bank accounts and virtual payment addresses. The funds were then converted into cash and foreign exchange.
The ED alleged that Vij operated Ranjan Moneycorp Private Limited and KDS Forex Private Limited to receive and convert the proceeds. Similarly, it alleged that Bhupesh Arora exercised control over several companies that were used to layer proceeds of cyber fraud. The agency pointed to bank statements and transaction details to allege that the cash and foreign currency obtained through the operation was delivered to Arora and his contacts.
Bhupesh Arora was granted bail by the Delhi High Court in February after the Court noted that material placed against him did not show any prima facie connection to the alleged laundering. The High Court also considered that the FIR which served as the predicate offence had been quashed by the Court on account of a compromise between the parties.
In August, the High Court refused bail to Rohit Vij in a separate judgment. The High Court distinguished Vij’s role from that of Arora in consideration of his involvement with the entities that converted the funds to cash and foreign exchange.
The ED challenged Arora’s bail before the Supreme Court. Rohit Vij also filed a separate plea challenging the High Court’s order refusing him bail.
Hearing the matters together, the Supreme Court set aside the bail order for Arora and dismissed Vij’s plea.
Senior Advocate Mukta Gupta with advocates Hemant Shah and Nitin Saluja appeared for Bhupesh Arora.
Senior Advocate Siddharth Aggarwal appeared for Rohit Vij.
ED was represented by ASG Anil Kaushik and advocate Arkaj Kumar.
