Thursday, 28 July 2011

CID Gets Court Nod To Freeze Firm Cash Flow - 26 July 2011

HYDERABAD: Making it clear that Indian money will not be allowed to be sent to foreign shores
during the pendency of the case, a division bench headed by Chief Justice Nisar Ahmad Kakru
on Monday set aside a restraint order that had prevented the CID from freezing the money
of Speak Asia Online company, a multinational money circulation firm.

The division bench comprising the chief justice and Justice Vilas Afzalpurkar made this order
while hearing a writ appeal filed by the state which challenged the restraint order
passed by a single judge of the court earlier which prevented the CID from going ahead in the matter.
Speak Asia company has appointed several business associates, including Harein Ventures,
all across the country and had collected Rs 11,000 from individuals with the promise
that it would pay them Rs 1000 every week for the next 52 weeks.

Noting that this is nothing but a money circulation scheme which squarely
falls under the Prize Chits Money Circulation (Prevention) Act,
the AP CID has started taking action against all such business associates.
Arguing the case of the state, advocate general A Sudarsan Reddy told the court that the
CID has identified as many as 19 lakh subscribers in the country who have already
together paid Rs 2100 crore to the company. So far, the CID has been able to
freeze Rs 134 crore, he said.

It was at this stage that Harein Ventures, the associates of Speak Asia, had approached the
HC and obtained a restraint order against the CID, the AG said. As a result of this order that
asked the CID not to freeze any more money from the associates, the CID was rendered helpless and
remained a mute spectator even when the company was transferring out Rs 462 crore to Singapore
during the pendency of this case, the AG said.

Speak Asia or its associates have not described the nature of their business anywhere, the AG pointed out.
Their claims about running a magazine does not sound authentic as he has not come across a
magazine that pays pack money to its subscibers, the AG said.

Noting that transferring money to foreign shores even during the pendency of
this case is a serious issue, the bench set aside the order of the single judge and
allowed the CID to do its job.

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