ED widens Punjab minister Sanjeev Arora probe, summons top PSPCL officials

Chandigarh: The Enforcement Directorate (ED) has summoned senior officials of the Punjab State Power Corporation Limited (PSPCL) as part of its expanding money laundering investigation linked to Punjab minister Sanjeev Arora.

According to officials, PSPCL Chairman and Managing Director Basant Garg and Director (Commercial) Harsharan Kaur Trehan have been asked to appear before investigators in Delhi beginning Monday.

The agency has also summoned Ludhiana-based investment broker Hemant Sood and businessman Chandra Shekhar Aggarwal, who were earlier searched in connection with alleged foreign exchange violations tied to the case.

Probe linked to alleged Rs 100 crore GST fraud

Sanjeev Arora was arrested by the ED on May 9 in connection with an alleged Rs 100 crore fake GST refund and money laundering racket involving mobile phone exports.

Before his arrest, Arora held the Power, Industry and Commerce portfolios in the Bhagwant Mann-led Punjab government. Though he later relinquished the portfolios, he continues to remain a minister.

The ED alleges that firms associated with Arora created a network of shell companies and dummy suppliers to generate fake invoices for mobile phone purchases without actual movement of goods.

Investigators claim these transactions were later projected as exports to companies based mainly in the UAE in order to fraudulently claim GST refunds.

PSPCL officials under scanner

Sources said the ED is examining power approvals, regulatory clearances and financial decisions linked to projects associated with Arora’s companies.

The agency is particularly probing the return of a bank guarantee worth nearly Rs 2 crore by PSPCL to Ritesh Properties and Industries Ltd, a company allegedly linked to Arora’s family and later renamed Hampton Sky Realty Limited.

The controversy relates to the Hampton Court Business Park project in Ludhiana.

According to investigators, PSPCL returned the original bank guarantee before obtaining a revised guarantee required under regulations after changes were sought in the project’s power infrastructure.

A letter issued by PSPCL on April 15 also surfaced during the investigation, showing that employees were allegedly asked to report to office at 5 am the next day on the instructions of the then Power Minister.

Shiromani Akali Dal leader Bikram Majithia alleged that important files were collected from staff during that period.

ED alleges shell companies and round-tripping

The ED claims firms linked to Arora procured mobile phones worth over Rs 157 crore between May and October 2023 using fake invoices issued by shell companies with little or no actual business activity.

The agency also suspects exports worth over Rs 102 crore were shown to UAE-based entities as part of an alleged round-tripping operation designed to conceal the origin of funds.

During court proceedings, investigators further alleged that one shell company involved in the transactions was registered in the name of a daily wage labourer who had neither the resources nor business capacity to run such high-value operations.

A Gurgaon court on Saturday extended Sanjeev Arora’s ED remand by two more days after the agency argued that further custodial interrogation was necessary.

The ED told the court it is continuing to investigate alleged benami properties, suspicious financial transactions and the movement of funds through shell entities connected to the case.

Investigators are also examining Arora’s bank accounts, investments and property transactions, including assets allegedly purchased in Gurgaon.
(With PTI inputs)