INDIA. Mumbai: The Directorate of Enforcement (ED) has seized six immovable properties worth Rs 24.64 crore belonging to M/s Venkateshwara Hatcheries Pvt. Ltd (VHPL) located in Maharashtra and Karnataka, in accordance with the provisions of the Foreign Exchange Management Act (FEMA) 1999.
M/s Venkateshwara Hatcheries Pvt. Ltd, with its corporate office in Tamil Nadu, has offices across the country.
ED’s investigation revealed unlawful remittances by VHPL to its wholly owned subsidiary, M/s Venky’s London Limited (VLL), located in Cardiff, UK, since 2010. VHPL incorporated VLL as its wholly owned subsidiary in 2010.
VHPL had declared to the Reserve Bank of India (RBI) that M/s VLL was engaged in recreational activities, specifically running a football club known as “Blackburn Rovers Football Club PLC” (BRFC).
After incorporating M/s VLL, VHPL remitted substantial funds disguised as equity infusion to sustain the loss-making club without generating any profit from these investments.
VHPL remitted British Pounds (GBP) 21,90,83,419, equivalent to Rs. 1963.60 crore, to VLL since its inception. Out of this, VHPL diverted GBP 33,78,378 to acquire 53,00,000 shares of an entity named M/s Hitlab Inc. Canada, which is partially owned by American Singer Akon.
Akon had reportedly performed at the private birthday party of one of the promoters of M/s VHPL, B Balaji Rao, in Pune, Maharashtra. VHPL also invested GBP 33,78,378, equivalent to Rs. 24,61,82,405/-, in an unrelated loss-making entity.
ED identified multiple FEMA violations, including misdeclarations in the remittances. VHPL wrongly claimed these remittances as equity infusion in its wholly owned subsidiary with the intent to siphon off a substantial amount to an unrelated loss-making entity.
Moreover, these investments were not declared to RBI. Consequently, the properties of the company were seized under the provisions of Section 37A of FEMA, as stated in the ED statement.
Savi commodity and Capital services
In a separate case, ED provisionally attached 26 residential flats and shops valued at Rs. 40.62 crore, belonging to M/s Geodesic Limited (GL) and others, under the provisions of the Prevention of Money Laundering Act (PMLA), 2002. This attachment, combined with previously attached immovable properties worth Rs. 16.52 crore, brings the total attachment in the case to Rs. 57.14 crore.
The attached properties were registered in the names of M/s Savi Commodity and Capital Services Pvt Ltd, M/s J & J Network Consultancy (P) Limited, Dinesh Jajodia, and others, located in Maharashtra and West Bengal.
ED launched an investigation based on an FIR registered by MIDC Police Station (Andheri, Mumbai), under various sections of the IPC against the directors of M/s Geodesic Ltd (GL), including Prashant Mulekar, Kiran Kulkarni, Pankaj Kumar Srivastava, and Tax Consultant Dinesh Jajodia.
The charges against them involve defrauding shareholders and foreign currency convertible bond (FCCB) holders of USD 125 Million (Rs 1040.77 crore).
GL had raised FCCB funds in 2008 for overseas acquisitions and investments in Joint Ventures/ wholly owned subsidiaries. However, these funds were misappropriated for investment and lending activities in other overseas companies and were also transferred to Indian accounts with the intention to siphon off foreign funds.
M/s. GL further misappropriated shareholders’ money through fictitious sale/purchase transactions of software with six major shell companies. The funds under Jajodia’s control were transferred into shell companies and individual accounts of Savi Group of companies.
Earlier, Mulekar, Kulkarni, Srivastava, and Jajodia were taken into custody by ED on charges of defrauding shareholders and FCCB holders.
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