ED bars summons to advocates, exceptions need director's approval under law
The Enforcement Directorate (ED) on Friday issued a circular instructing its field formations not to issue summons to any advocate in violation of Section 132 of the Bhartiya Sakshya Adhiniyam, 2023. This section states that no advocate, at any point of time, should disclose any communication made to him without the client's consent.The circular mandates that any summons under the exceptions to this provision require prior approval from the Director of the Enforcement Directorate.advertisementThis comes amid the probe agency's investigation into a money laundering case involving Care Health Insurance Ltd (CHIL) concerning the issuance of Employee Stock Options (ESOPs) at significantly undervalued prices.
The case centres around the Employee Stock Ownership Plans (ESOPs) issued on May 1, 2022, which were reportedly priced much lower than market value. This issuance allegedly took place despite a formal rejection of the ESOP proposal by the Insurance Regulatory and Development Authority of India (IRDAI).As part of the ongoing probe, the ED summoned Pratap Venugopal, an independent director of CHIL, to ascertain the circumstances surrounding the issuance of the ESOPs and the board's discussions following IRDAI's rejection. However, given that Venugopal is a senior advocate practicing in the Supreme Court, the summons issued to him has now been withdrawn.advertisementThe ED said that any documents required from him in his capacity as an independent director will be requested via email.On July 23 last year, the IRDAI directed CHIL to revoke or cancel any ESOPs that remain unallotted. In addition, the regulator imposed a penalty of Rs 1 crore on CHIL for non-compliance with its directives.Must Watch
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Time of India
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The Securities and Exchange Board of India (Sebi) in its last board meeting unveiled a sweeping set of regulatory reforms that reflect both market responsiveness and forward-looking policymaking. This meeting wasn't just a quarterly update — it was a full-body reset on many longstanding regulatory frameworks, aimed at easing compliance burdens, deepening market access , and aligning Indian capital markets with global standards. This meeting also marked a strategic recalibration of SEBI's regulatory posture. It demonstrated a commitment to reducing compliance friction while safeguarding core market integrity. In doing so, SEBI is responding to the evolving expectations of a maturing market, one that now hosts retail participation at scale, large institutional flows, digitised securities infrastructure, and increased cross-border alignment. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Here's The Average Price of a 6-Hour Gutter Upgrade in Rowland Heights Read More Undo Simplification of Institutional Fund Raising Play Video Pause Skip Backward Skip Forward Unmute Current Time 0:00 / Duration 0:00 Loaded : 0% 0:00 Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 1x Playback Rate Chapters Chapters Descriptions descriptions off , selected Captions captions settings , opens captions settings dialog captions off , selected Audio Track default , selected Picture-in-Picture Fullscreen This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Opacity Opaque Semi-Transparent Text Background Color Black White Red Green Blue Yellow Magenta Cyan Opacity Opaque Semi-Transparent Transparent Caption Area Background Color Black White Red Green Blue Yellow Magenta Cyan Opacity Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Drop shadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Ads By Google Ad will close in 29 Skip ad in 4 Skip Ad SEBI also gave its green light to a streamlined disclosure regime for Qualified Institutions Placements. The lengthy and often duplicative disclosure requirements will give way to concise, issue-specific and material risk disclosures, leveraging publicly available data. Companies will no longer need to reproduce financials already present in the public domain, making capital-raising quicker and more efficient. Startup Founders Rejoice When new-age tech companies decide to go public, they reach a point where they can no longer use the ESOP (Employee Stock Option Plan) benefits available to startup promoters. At the same time, the founders are usually classified as 'promoters' in the draft prospectus (DRHP) because of their combined shareholding. Once identified as promoters, and given the rules that apply to listed companies under SEBI's ESOP regulations, they are no longer allowed to receive ESOPs—regardless of whether the company is still considered a startup. This has been a long-standing problem, and many industry bodies, including FICCI, have given representation to the regulator to address this concern. Resultantly, SEBI in the floated consultation paper of March 2025 sought to clarify the treatment of Employee Stock Ownership Plans granted to founders. Live Events As per this recent progressive decision, the startup founders classified as promoters can now continue to hold and/or exercise share-based benefits, such as ESOPs, even after the company lists, provided these benefits were received at least one year prior to filing the DRHP. Freedom to Merchant Bankers After previously proposing that merchant bankers separate their non-regulated activities into a different legal entity, SEBI has eased its stand. Merchant bankers can now conduct regulated as well as certain non-regulated, fee-based financial services within the same entity — provided they comply with their respective financial sector regulators' guidelines and SEBI-prescribed conditions. This was in direct response to feedback from key industry bodies like FICCI, which warned of unnecessary cost and complexity. 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News18
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The network, with both domestic and international connections, was strategically built to finance illegal activities, including terror training, communal violence, and mobilising citizens against the Indian state. MK Faizy: The Mastermind Behind the Operation At the heart of this extensive conspiracy lies MK Faizy, the National President of SDPI and a member of the National Executive Council (NEC) of PFI. According to the ED investigation, Faizy was the mastermind behind the financial operations of SDPI, playing a pivotal role in orchestrating PFI's underground economy. His position allowed him to mobilise funds both domestically and internationally, especially from Gulf nations such as Qatar and UAE, where a significant portion of the illicit funds originated. Faizy personally oversaw the fundraising efforts, which included cash donations, cadre fees, and money laundering through SDPI's organisational bank accounts. ED sources revealed that Faizy personally handled Rs 15.4 lakh in illicit funds through HDFC Bank, disguising it as legitimate political income. These funds were then redirected to support violent riots, murder plots, and radical training camps, including several notorious terror-linked operations. Faizy's central role within SDPI and his direct involvement in terror financing has led the ED to label him as the primary architect of a sophisticated, transnational terror financing network. Faizy's operations were further bolstered by his close associate Wahidur Rahman, who managed field operations and controlled the actual cash channels used to funnel funds through party sympathisers. Rahman coordinated with various operatives to move illicit money, ensuring its effective use in SDPI's physical operations, including acts of violence and destabilising protests. Rauf Sherif, a crucial player in the network, headed the Campus Front of India (CFI), which is linked to PFI's student front. Sherif played a significant role in channelling funds from abroad through Shafeeque Payeth, a key operator based in Doha. Payeth's operations in the Gulf were integral to the transfer of cash from overseas donors into SDPI's hands. In addition, Ashraf MK and Abdul Razak were pivotal in converting illicit funds into real estate and property, further laundering the money into legitimate assets. The SDPI state units across various regions were also involved in hoarding and laundering the money, acting as crucial storage points for the criminal funds. The investigation also revealed Rasheed and Kunju, two operatives linked to SDPI, who were directly involved in physical crimes funded by SDPI. These individuals were integral to the violent operations on the ground, executing plans for communal violence, and engaging in illegal acts designed to fuel unrest and radicalisation across Indian states. Well-Organised Transnational Conspiracy The case has unravelled a carefully coordinated and expansive network of radicalisation and terror financing, which operated not only through domestic channels but also extended across borders. The SDPI-PFI nexus, through its transnational network, sought to utilise political and civil liberties infrastructure to further their ideological war against the Indian state. They exploited legal avenues, including using their political party status and social activism fronts, to mask their true intentions—funding terrorism and radicalisation efforts. The network used underground hawala networks, illegal cash donations, and fraudulent financial practices to raise money from sympathisers abroad, while simultaneously using the SDPI's political influence to create public disturbances, thereby feeding into their larger goal of sowing discord and instability within the nation. Following the unearthing of this network, the Enforcement Directorate has initiated a series of actions, including freezing accounts, seizing properties linked to illicit transactions, and interrogating key members of PFI and SDPI. The investigation is ongoing, with the ED planning to expand the probe into the wider network of international financiers and operatives involved. Sources close to ED have stated that further arrests and more seizures are expected as the investigation deepens, and international cooperation may be sought to bring to justice those operating from foreign territories, particularly the Gulf countries, which have emerged as key nodes in the funding network. About the Author Manoj Gupta Group Editor, Investigations & Security Affairs, Network18 Get breaking news, in-depth analysis, and expert perspectives on everything from politics to crime and society. Stay informed with the latest India news only on News18. Download the News18 App to stay updated! Location : New Delhi, India, India First Published: June 21, 2025, 12:06 IST
