A Delhi court on Tuesday remanded I-PAC co-founder and director Vinesh Chandel to 10 days of Enforcement Directorate (ED) custody in a money laundering case linked to alleged hawala transactions, intensifying scrutiny of the political consultancy firm just days ahead of Assembly polls in West Bengal and Tamil Nadu.

Chandel was arrested at 7.45 pm on Monday after questioning, ED officials said. He was produced before Additional Sessions Judge Shefali Barnala Tandon at her residence around 11.55 pm, and the court granted ED custody till 3.30 am.

The 2015-founded Indian PAC Consulting Pvt Ltd (I-PAC), which provides political consultancy to parties such as the TMC and DMK, has come under the scanner in a case registered under the Prevention of Money Laundering Act (PMLA) on March 28. The case stems from a Delhi Police FIR alleging falsification of accounts and handling of unaccounted funds by the firm’s directors, including Chandel, Pratik Jain, and Rishi Raj Singh, and is “linked” to the West Bengal coal scam probe.

According to the ED, Chandel, a law graduate from NLIU Bhopal and a 33 per cent shareholder in I-PAC, is a “key decision-maker” in the company. The agency alleged that under his 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.”

The probe agency further alleged that Chandel played a “key role” in introducing “sham” funds worth Rs 3.50 crore into I-PAC under the guise of unsecured, interest-free loans. It also told the court that the firm split funds, including those received from political parties, into cash and non-cash components that were “utilised” for election-related expenditure and other purposes, including influencing public perception.

In her order, the judge said there were grounds to believe Chandel had been “actively” involved in processes related to the generation, diversion, and possession of proceeds of crime worth several crores, given the modus operandi attributed to I-PAC. The court also noted allegations that he was involved in the use of “hawala channels” and permitted the use of “unaccounted” cash outside the formal banking system.

The ED also alleged that Chandel instructed deletion of emails and sensitive data from key employees’ accounts following searches at I-PAC’s Kolkata office on January 8, thereby “deliberately” attempting to destroy evidence and obstruct the investigation. Separately, the agency claimed that I-PAC was involved in laundering proceeds of crime amounting to around Rs 50 crore.

Chandel’s legal team, led by senior lawyer Vikas Pahwa, opposed the remand, telling the court that his client was “completely oblivious” of the existence of the March 28 ECIR, which caused “grave prejudice” to his rights. The defence further argued that the proceedings were “politically motivated, allegedly set in motion in the backdrop of impending state elections in Tamil Nadu and West Bengal.”

There was no immediate reaction from I-PAC on Chandel’s arrest or the allegations.

The case has also triggered political reactions. Trinamool Congress national general secretary Abhishek Banerjee said in a post on X that Chandel’s arrest just days before the Bengal polls is not just alarming but undermines the idea of a level playing field.

Earlier in January, the ED had raided I-PAC’s Kolkata office and the residence of Pratik Jain as part of its coal scam probe based on a CBI FIR. West Bengal Chief Minister Mamata Banerjee had visited the raided premises along with state officials and was accused by the ED of taking away key documents. The agency said its searches were “obstructed,” alleging that documents and devices were forcibly removed.

The TMC and the chief minister denied the allegations, stating that the ED was attempting to seize election strategy-related documents from I-PAC’s office ahead of the Assembly elections.