New Delhi, 14 April

A Delhi court on Tuesday sent I-PAC co-founder and director Vinesh Chandel to ten days of ED custody following his arrest by the Enforcement Directorate in a case linked to alleged hawala transactions of funds received from political parties and other entities.

The action comes days ahead of the West Bengal and Tamil Nadu Assembly Polls, where the 2015-established organisation is providing political consultancy to parties like the TMC and DMK, respectively.

ED officials said Chandel was arrested at 7.45pm on Monday after questioning. He is a law graduate from NLIU Bhopal and a "key decision-maker" of I-PAC, being a 33 per cent shareholder of the company.

He was produced at the residence of Additional Sessions Judge Shefali Barnala Tandon around 11.55pm, and the court sent him to 10 days ED custody at 3.30am.

ED officials said Chandel was arrested in a fresh case filed under the Prevention of Money Laundering Act (PMLA) on 28 March after taking cognisance of a Delhi Police FIR against Indian PAC Consulting Pvt Ltd (I-PAC) on charges of falsification of accounts and handling of unaccounted funds through its directors, who include Chandel, Pratik Jain, and Rishi Raj Singh.

This case is "linked" to the coal scam probe of West Bengal, they said.

Chandel's premises in Delhi, apart from that of Rishi Raj Singh in Bengaluru and that of former Aam Aadmi Party (AAP) communications in-charge Vijay Nair in Mumbai, were raided by the ED on 2 April as part of the 28 March filed case.

The agency alleged that under Chandel's direction, I-PAC "adopted a modus operandi of splitting receipts between accounted (banking channels) and unaccounted (cash) modes, thereby deliberately suppressing the true nature and extent of its financial activities."

The ED claimed, "These transactions were deliberately structured to provide a colour of legitimacy to otherwise illicit funds and were used for layering and integration of proceeds of crime into the formal financial system."

It is alleged that Chandel played a "key role" in the introduction of "sham" funds of Rs 3.50 crore received from a company into I-PAC under the guise of unsecured, interest-free loans.

The judge in her order said that there were reasons to believe that Chandel had been "actively" involved in the processes and activities connected with the generation, diversion, and possession of proceeds of crime amounting to several crores of rupees in view of the modus operandi undertaken by I-PAC.

The ED told the court that I-PAC split its funds, including those received from political parties, into non-cash and cash, which were "utilised" for election-related expenditure and other purposes, including influencing public perception.

There was no immediate reaction from I-PAC on the arrest of Chandel or on the charges made against it by the ED.

Chandel's legal team, led by senior lawyer Vikas Pahwa, told the court that his client was "completely oblivious" of the existence of the 28 March ECIR (ED FIR), which caused "grave prejudice" to his rights.

The counsel argued that the proceedings in the case were "politically motivated, allegedly set in motion in the backdrop of impending state elections in Tamil Nadu and West Bengal."

The court, while granting Chandel's custody to ED, said there were reasons to believe he had been involved in the use of "hawala channels" and allowed use of "unaccounted" for cash, or informal transfers, outside the banking system.

The court order cited ED's allegation that Chandel instructed the deletion of emails and sensitive data from the accounts of key employees after the searches undertaken by the ED against I-PAC in Kolkata on 8 January, thereby "deliberately" attempting to destroy evidence and obstructing the course of investigation.

The ED claimed separately that I-PAC was involved in laundering proceeds of crime of about Rs 50 crore.

Abhishek Banerjee, the national general secretary of the Trinamool Congress (TMC), in a post on X late Monday night, said Chandel's arrest barely 10 days before the Bengal election is not just alarming, but shakes the very idea of a level playing field.

In January, the ED raided the I-PAC office in Kolkata and Pratik Jain's house as part of its probe into the alleged coal scam case in West Bengal based on a CBI FIR.

Soon after, West Bengal Chief Minister Mamata Banerjee landed at the raided location along with state government officials and was alleged to have taken away certain crucial documents.

The ED said its searches against I-PAC and Jain in Kolkata were "obstructed" by Banerjee, claiming relevant documents and gadgets were forcibly taken away by her and the state administration.

The chief minister and the TMC countered these allegations, saying said the ED was attempting to take its election-strategy-related documents from I-PAC premises just before the assembly polls in the state.