ED slaps Rs 566.5 crore fine on Chennai-based firm, seizes property worth Rs 195 crore
This excess amount of Rs 195 crore was parked in the accounts of two UAE-based entities (indirectly controlled by the Indian Beneficiaries) under the guise of fictitious services provided by these entities, ED said.
CHENNAI: The Enforcement Directorate on Friday said they have slapped a Rs 566.5 crore penalty on a city-based firm, GI Retail Pvt Ltd and also confiscated Rs 195 crore worth of properties of the firm for violation of the Foreign Exchange Management Act (FEMA) in a case pertaining to transfer of shares of an entity it owned, through a Mauritius-based entity.
ED’s action is based on an October 28 adjudication order based on its investigation into the sale of Hermes I Ticket Pvt Ltd (owned by GI Retail) to Mauritius-based Emerging Markets Investment Fund (EMIF), which in turn transferred the shares to German-based financial services company, Wirecard at an enhanced value.
“The entire transaction was found to have been fraudulently designed in such a manner to conceal the fact that the shares of M/s. Hermes I Ticket was always meant to be bought by Wirecard at an already fixed price. It was further found that the transactions through EMIF 1A were meant merely to facilitate the delinquent shareholders of GI Retail to hold and conceal the excessive amount of the actual sale price outside India which was approximately Rs 195 crore,” said an official statement.
This excess amount of Rs 195 crore was parked in the accounts of two UAE-based entities (indirectly controlled by the Indian Beneficiaries) under the guise of fictitious services provided by these entities, ED said.
Having found the beneficiaries to have acquired and held huge amounts of foreign exchange but failing to repatriate the same into India, the ED invoked provisions of Section 37A of FEMA seizing various equivalent properties belonging to the perpetrators in India to the tune of Rs 195 crore, the agency said.
