Guwahati, Oct. 24: The Enforcement Directorate (ED) has registered a money laundering case against those allegedly involved in illegal diversion and sale of coal — allotted by the Coal India Limited to small-scale units of Assam — in the open market.

“The ED registered a case in this connection under the Prevention of Money Laundering Act last week and began their investigation,” an official source told The Telegraph.

The directorate registered a separate case and started an investigation into the money laundering angle in the wake of the CBI carrying out near-simultaneous raids at three places in Guwahati, two at Margherita in Tinsukia district and one at Thiruvananthapuram in Kerala in connection with the scam on September 28. The scam is suspected to run into more than Rs 70 crore. The CBI had registered a case against former managing director of Assam Industrial Infrastructure Development Corporation (AIIDC) Nur Mohammad, director of a Guwahati-based private firm, M/s Mahalaxmi Continental Limited, Naveen Singhal alias Naveen Gupta, area sales manager of North Eastern Coalfields Deepa Kumar K. and some others.

There were allegations that in the financial year 2008-09, coal allotted by Coal India Limited from North Eastern Coal Fields Limited at Margherita to the AIIDC was allegedly diverted and sold in the open market instead of supplying them among the eligible small units like brick kilns and tea gardens.

It was alleged that the conspiracy was hatched by the former managing director of AIIDC, CIL officials and private parties.

The AIIDC, which is an Assam government undertaking, was established for the purpose of securing and assisting in the rapid and orderly establishment of industries.

The source said the ED probe would try to find out if the accused persons have acquired property through the proceeds of corruption.

“If it was found that the accused persons had amassed assets unlawfully from the scam money, the ED will initiate proceedings to attach these properties under the relevant provision of the Prevention of Money Laundering Act,” he said.

According to the source, the ED proceedings under the act would focus on recovering the money allegedly siphoned off by the accused persons by depriving the eligible small units. He said the ED has started a separate probe to recover the public money worth crores of rupees allegedly pocketed by the accused persons since the CBI probe would not be able to do so.

“The CBI can prosecute the accused under appropriate provisions of the Indian Penal Code or under the Prevention of Corruption Act. A sterner charge of breach of trust under Section 409 of the IPC carries the maximum punishment of life sentence and minimum 10 years’ jail term while the charges of forgery, cheating read with criminal conspiracy and those under the Prevention of Corruption Act only carry the maximum sentence of seven years’ jail term,” he said.

“There is no provision of law except the Prevention of Money Laundering Act under which defalcated funds can be recovered,” the source said.

The CBI during its September 28 raids claimed to have recovered cash worth Rs 48,47,000, US $15,000, bank documents and other “incriminating documents” from Naveen Singhal’s residence in Guwahati.

The officials also claimed to have recovered Rs 1.2 lakh and documents of 12 banks accounts and some other land documents from Nur Mohammad’s residence at Santipur area of the city. The CBI stated that bank investment documents seized from Mohammad’s house were valued at about Rs 1 crore.

Raids were also carried out at the office and residence of Deepa Kumar K. at Margherita in Tinsukia district. The CBI also raided Kumar’s ancestral house at Thiruvananthapuram.