powers of economic offence wing to order redemption of mutual fund units
Bhushan K
(Querist) 20 April 2011
This query is : Resolved
Hi All,
We are an AMC and few months ago, we had received a letter from economic offence wing of police dept to freeze certain folios of mutual fund belonging to someone involed in criminal offences. we had acted on the instructions of the police. later on they asked us to provide them the latest accounts statement and we provided them. Now we have received another letter from them asking us to redeem the units and invest in liquid fund so that the money remain safe from market fluactuations and can be returned to the depositors.
My Query is whether EOW of police has powers to issue such order and if yes under what section and are we required to abide by the same. Should we ask them to provide us with Court order ?
Thanks
Bhushan
A V Vishal
(Expert) 20 April 2011
No the EOW has no such powers to ask the banker to redeem the units, it can be done only after the case is decided. In case you redeem the units without the consent of the unit holder then the bank will be also be liable for the financial losses of the unit holder.
Amit Pateria
(Expert) 21 April 2011
Dear Member,
The opinion of the learned expert is of absolute weightage. It is the duty of the Police to investigate the the offense and seize certain documents/ folios, take them into their custody, following the due process, in order to prove the guilt of the offender and you did the right thing by helping them out with their investigation. However, if your good self is being asked to perform certain acts like redeem the units and invest in liquid fund then it is advisable to report the same to the SP/ Commissioner.
