Indian Authorities Freeze Assets Linked to $6 Million Manipur Fraud Network

Indian authorities have seized assets worth Rs 50.8 crore (approximately $6 million) connected to a sprawling financial fraud network in Manipur, marking the third round of provisional attachments in a case that links high-yield investment schemes to alleged secessionist activities. The Enforcement Directorate (ED), the country’s financial crime probe agency, issued the order targeting the Salai Group of Companies, the SMART Society, and various associated entities. The seized assets include industrial complexes, agricultural farms, and bank balances.

Background and Context

The investigation traces its roots to a criminal complaint filed by the Manipur Police under the Indian Penal Code (IPC), 1860. The initial complaint named Yambem Biren and Narengbam Samarjit, leaders of a self-styled “Manipur State Council,” accusing them of sedition and waging war against the state. Authorities allege that the duo used the guise of financial services to fund activities aimed at undermining the sovereignty of the Union of India. Following the initial police report, the National Investigation Agency (NIA) filed a charge sheet under the Unlawful Activities (Prevention) Act, 1967, signalling the national security implications of the alleged fraud.

Key Figures and Entities

Central to the alleged scheme is the Salai Group, a conglomerate of private companies, and its affiliate, the SMART Society. Investigators claim that funds collected from the public were laundered through a network of 19 group companies. Key figures include Biren and Samarjit, who are accused of mobilizing public deposits under the pretext of running a legitimate government council. According to the Central Bureau of Investigation (CBI), which registered a separate case in March 2023, the scheme functioned as an illegal Ponzi operation, defrauding the public of Rs 46.43 crore.

Legal and Financial Mechanisms

The financial architecture of the alleged fraud relied on Salai Financial Services (SAFFINS), a entity registered under the Bombay Money-Lenders Act. While this registration authorized SAFFINS only to lend money, investigators allege the firm operated as a de facto bank, accepting deposits without the required authorization from the Reserve Bank of India (RBI). The accused reportedly promised investors a 36 per cent annual return to funnel money into the network. Once collected, these funds were layered through various business investments, property purchases, and personal expenses, including foreign travel and customs duty payments. The CBI’s charge sheet, filed in November 2024, cited violations of the Banning of Unregulated Deposit Schemes Act, 2019, a law designed to curb illicit deposit-taking activities that prey on the public.

International Implications and Policy Response

This case highlights the intersection of financial crime and domestic security threats. By routing proceeds of crime through seemingly legitimate business ventures—ranging from rice mills to emu farms—the alleged perpetrators demonstrated how regulatory blind spots in the non-banking financial sector can be exploited to fund extremism. The enforcement actions, including the provisional attachment orders confirmed by the Adjudicating Authority under the Prevention of Money Laundering Act (PMLA), underscore the government’s reliance on asset freezing to disrupt the financial lifelines of unauthorized groups.

Sources

This report draws on official statements from the Enforcement Directorate, court filings referenced in agency reports, and the Central Bureau of Investigation charge sheet from 2024. Legal context is derived from the Indian Penal Code and the Banning of Unregulated Deposit Schemes Act, 2019.