Allahabad: Saying that the matter needed a thorough probe as it had "national ramifications", the Allahabad High Court on Friday directed the Enforcement Directorate to investigate charges of money laundering against former Samajwadi Party general secretary Amar Singh.

"Money laundering poses a serious threat to financial system integrity.It may emerge as a parallel economic system within a country controlled by a few. This may destabilise and
perish a sound economy", a division bench comprising justices Imtiyaz Murtaza and S S Tiwari said.

The court asked the ED to commence the investigation "within two weeks" and submit a status report before the court within a month of the commencement of the probe.

"We are of the firm view that it is a pre-eminently fit case for exercise of extra-ordinary power and the matter needs thorough probe by Special Cell as the matter has national ramifications", they said.

The directions came after the court bench dismissed a petition filed by the Rajya Sabha MP who had challenged an FIR lodged in Kanpur nearly two years ago accusing him of various financial irregularities when the party was in power in Uttar Pradesh.

Singh had moved the court challenging an FIR lodged at Babupurwa Police Station in Kanpur on October 15, 2009 by a local resident Shiv Kant Tripathi under various sections of the IPC, the Prevention of Corruption Act and the Money Laundering Act.

Tripathi had also moved the court with the prayer that the issue be probed by the ED.

The petitions by Singh and Tripathi were clubbed together and heard by the bench which had reserved its judgement on March 28.

Senior lawyer Ram Jethmalani, who had argued on behalf of Singh, had described the FIR lodged against his client as "clearly an act of malice and fraud" aimed at "settling political scores" and, hence, was "liable to be quashed".

However, the court said it found "no substance in the submissions that the proceeding is liable to be quashed on grounds of malafide and political rivalries".

The court took a serious note of the allegation made by the petitioner that Singh, when the Samajwadi Party was in power in UP and he was the Chairman of the UP Development Council - a post equivalent to that of a cabinet minister - "had indulged in money laundering business by creating a web of shell companies".

Taking note of the fact that "the companies which are alleged to be shell companies are registered in various states", the court held "the ED being a central agency shall be the appropriate cell capable of carrying out a thorough probe.

It directed that the matter be listed for further hearing in the first week of July when the authorities shall appear in person and submit the first status report.