CHENNAI: The Enforcement Directorate, Chennai, on Friday said it has slapped a penalty of Rs 566.5 crore and ordered the confiscation of properties worth Rs 195 crore of Chennai-based GI Retail Private Ltd for violation of the Foreign Exchange Management Act (FEMA) in a case pertaining to transfer of shares of a company owned by it to German firm Wirecard through a Mauritius-based entity.
The action was taken as per the order passed by an adjudication authority of the ED on October 30 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 Wirecard at an exorbitantly enhanced value.
According to the ED, the entire gamut of transactions was found to have been fraudulently designed in such a manner to conceal the fact that the shares of M/s Hermes I Ticket were meant to be bought by Wirecard at an already fixed price.
It was found the transactions through EMIF 1A were meant to facilitate the delinquent shareholders of GI Retail to hold and conceal the exorbitant sale valued at Rs 195 crore.
‘Rs 195 crore in two UAE-based accounts’
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, ED said.
Having found the beneficiaries to have acquired huge amounts of foreign exchange but failed to repatriate the same to 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. The complaint filed by the ED regarding various FEMA contraventions by the noticees along with a prayer to confiscate the seized properties was taken up for adjudication by an authority who on October 30 ordered a total penalty of Rs 566.5 crore and confiscation of their properties worth Rs 195 crore.