What is PMLA?

The Prevention of Money Laundering Act, which came into force from July 1, 2005, forms the core of the legal framework in the country to combat money laundering. Director (Financial Intelligence Unit) and Director (Enforcement) have been conferred with exclusive and concurrent powers under relevant sections of the Act to implement them. The Act imposes obligations on banking companies, financial institutions and intermediaries to verify the identity of clients, maintain records and furnish information to these authorities.

Prescribing punishment of up to seven years of rigorous imprisonment to those found guilty, the Act not only provides for freezing, seizing and confiscating the proceeds of crime, but also fixes responsibility on the accused to prove their innocence.

Incidentally, Koda is the first MP and ex-CM to have been booked under the PMLA and his is the biggest case lodged by the ED under the Act so far.

How did Koda manage to build his multi-million ‘empire’?

Investigations by the I-T and ED revealed that during his 23-month-long tenure as chief minister — from September 18, 2006, to August 26, 2008 — more than 26 MoUs were signed and an equal number of applications seeking mining leases for coal and iron ore were cleared by Koda . In the absence of a transparent policy adopted by the state government, Koda, with the help of his associates, is alleged to have ‘charged’ Rs 2-20 crore for inking an MoU and Rs 30-80 crore for recommending each application for a mining lease. The money was deposited either with the Mumbai-based company Balaji Bullion, or with hawala operators Manoj Punamiya, Arvind Vyas and Lalit Jain. The funds used by the accused across the country and abroad, including in the Lok Sabha elections in West Singhbhum, were allegedly routed through these Mumbai-based hawala operators.

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