Mumbai, June 20 The Enforcement Directorate’s (ED) Mumbai Zonal Office is probing allegations of money laundering related to the issuance of Employee Stock Ownership Plans (ESOPs) by Care Health Insurance Ltd (CHIL), allegedly in violation of regulatory directions.
According to the ED, CHIL issued ESOPs on May 1, 2022, at a significantly reduced price, despite the Insurance Regulatory and Development Authority of India (IRDAI) having rejected the proposal.
"As part of the investigation, a summons was issued to Pratap Venugopal, an Independent Director of CHIL, to understand the circumstances under which the company has issued the ESOPs despite its rejection by the IRDAI and subsequent discussions in the Board of CHIL in this regard," the ED said in a press statement.
"It is also pertinent to note that the IRDAI on July 23, 2024, has directed the CHIL to revoke or cancel any ESOPs that have yet to be allotted and has also imposed a penalty of Rs 1 crore on CHIL for non-compliance with regulatory directions", it said.
The matter was reportedly discussed in subsequent board meetings of CHIL. As part of the investigation, the ED issued a summons to senior advocate Venugopal, who serves as an Independent Director on CHIL’s board, to ascertain the circumstances under which the company proceeded with the ESOP allotments.
Subsequently, acknowledging Venugopal’s stature as a senior advocate in the Supreme Court, the ED has now withdrawn the summons.
The agency clarified that any required documents related to his role as an Independent Director would be sought via email.
"Further, the ED has also issued a Circular for the guidance of the field formations that no summons shall be issued to any advocate in violation of Section 132 of the Bhartiya Sakshya Adhiniyam, 2023," the ED said in a statement.
"Further, if any summons needs to be issued under the exceptions carved out in the proviso to section 132 of the BSA, 2023, the same shall be issued only with the prior approval of the Director, ED," it added.
Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor