D K Shivakumar arrest in ED case stems from 2017 IT raids

The income tax department carried out searches in August 2017 in premises linked to Shivakumar. (ANI Photo/File)

The arrest of former Congress minister and strongman D K Shivakumar by the directorate of enforcement (ED) in connection with a money laundering case registered by the ED last year is the fall out of an investigation carried out by the income tax department against Shivakumar in 2017 where Rs 8.83 crore in unaccounted cash was found in New Delhi in locations linked to the Congress leader.

The income tax department carried out searches in August 2017 in premises linked to Shivakumar even as the then Congress minister was sheltering 44 Congress MLAs from Gujarat at a resort outside Bengaluru ahead of a crucial poll in Gujarat for Rajya Sabha seats where Congress leader Ahmed Patel’s fortunes were dependent on the 44 MLAs sheltered by Shivakumar.

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After the income tax department found Rs 8.83 crore in unaccounted cash at premises linked to the Congress leader and stated in a complaint that Shivakumar was not able to account for the source of the funds the ED registered a case under the Prevention of Money Laundering Act, 2012 and section 120 B of the Indian Penal Code for criminal conspiracy against Shivakumar and four associates.

The ED first issued summons to Shivakumar to appear for investigations in February this year but the summons were stayed by a court. The ED issued fresh summons on August 29 for the Congress leader to appear on August 30 after the Karnataka high court refused to quash the ED summons.

Justice Arvind Kumar of the Karnataka high court rejected a plea made by Shivakumar and four of his associates to quash the summons issued to them by the ED.

Shivakumar has argued that he cannot be prosecuted under the PMLA law since the unaccounted amount found in his possession during an income tax department search in August 2017 was not money that was proceeds of a crime as stipulated under the law. He has also argued that the tax evasion case brought against him by the IT department over the seizures remains undecided and hence he could not be prosecuted for the PMLA case.

The ED however argued that it is empowered to investigate whether the unaccounted funds were proceeds of crime irrespective of the outcome of the income tax cases.

"I congratulate my BJP friends for finally being successful in their mission of arresting me. The IT and ED cases against me are politically motivated and I am a victim of BJP’s politics of vengeance and vendetta," Shivakumar claimed on social media on Tuesday.

"IT raid on me was politically motivated for hosting Gujarat Congress MLAs. As a loyal soldier of Congress & a responsible politician, I did what party asked me to do, for which I am being targeted I have full faith in legal systems & will face this legally as well as politically," he had said earlier.