ED slaps notice on Emaar for Rs 8,600 crore

Published: 05th June 2013 08:21 AM  |   Last Updated: 05th June 2013 08:21 AM   |  A+A-

The Enforcement Directorate on Tuesday slapped a Rs 8,600 crore show-cause notice on construction major Emaar MGF Land Ltd and its sister firms for alleged forex rules violation, the biggest such penal action in country’s real estate sector.

The agency, which began an investigation in 2010 with regard to the group bringing in Foreign Direct Investment (FDI), alleged that the firm has violated the rules stipulated by the RBI in this regard and hence it stands guilty under the Foreign Exchange Management Act.

The agency claimed to have found that the group had disclosed to RBI that it is bringing FDI for developing construction related projects in India but violated it and used the funds for buying agricultutral land.

“We have not received any communication from government authorities and hence we are not in a position to comment. We emphasise that the company continues to uphold the highest standards of corporate governance and follows the laws of the land,” a spokesperson for Emaar MGF said.

It is expected, sources said, that the penalty proceedings against these violations would also be undertaken which could take up the total penalty amount to Rs 25,000 crore which is 300 per cent of the violations detected.

The agency, which enforces forex laws in the country, found that funds were received by the company and its “four subsidiaries from Dubai, Cyprus, Mauritius and other foreign countries under the FDI scheme of RBI since April 2005 to the tune of about Rs 8,600 crore.”

Emaar MGF Land Limited is a joint venture between Emaar Properties of Dubai and MGF Development Limited of India.

The Emaar MGF is embroiled in a controversy in AP too, in the development of a golf course, villas and flats, with allegations being levelled against it that it had reduced the share of state-owned APIIC in the joint venture project fraudulently.

Stay up to date on all the latest Nation news with The New Indian Express App. Download now
(Get the news that matters from New Indian Express on WhatsApp. Click this link and hit 'Click to Subscribe'. Follow the instructions after that.)

Comments

Disclaimer : We respect your thoughts and views! But we need to be judicious while moderating your comments. All the comments will be moderated by the newindianexpress.com editorial. Abstain from posting comments that are obscene, defamatory or inflammatory, and do not indulge in personal attacks. Try to avoid outside hyperlinks inside the comment. Help us delete comments that do not follow these guidelines.

The views expressed in comments published on newindianexpress.com are those of the comment writers alone. They do not represent the views or opinions of newindianexpress.com or its staff, nor do they represent the views or opinions of The New Indian Express Group, or any entity of, or affiliated with, The New Indian Express Group. newindianexpress.com reserves the right to take any or all comments down at any time.

flipboard facebook twitter whatsapp