NEW DELHI: Illegal funds sent from a Chinese entity, owned by a man named in the leaked Panama Papers, to Telangana-based granite businesses has been found after premises of a number of granite exporters, including that of state welfare minister Gangula Kamalakar, were raided, the ED claimed on Friday.
The federal agency launched the searches, under sections of the Foreign Exchange Management Act (FEMA), on November 9 at the offices and residential premises of Swetha Granites, Swetha Agencies, Sri Venkateshwara Granites Private Limited, PSR Granites Private Limited, Arvind Granites, Giriraj Shipping Agencies Private Limited and their related entities in Karimnagar and Hyderabad.
The premises of Kamalakar, allegedly linked to some of these companies, were also searched.
The minister for backward classes' welfare, food and civil supplies in the K Chandrasekhar Rao-led state government, who were abroad during the searches, later told reporters that he will cooperate with the agency and that he had done no wrong.
The ED, however, did not name Kamalakar in the statement.
"The above entities are exporting rough granite blocks to China, Hong Kong and other countries. During the course of the enquiry, it was found that the exported quantity was more than the quantity on which royalty was paid and there was under-reporting of the quantity while exporting," the ED statement said.
"In many instances, the export proceeds are not realised in the declared bank accounts, thereby indicating that the export proceeds are received through other than banking channels," it said.
The agency said it has seized Rs 1.08 crore cash, allegedly received in hawala against exports, apart from "voluminous" granite dispatch data of 10 years from the quarries.
"Multiple benami bank accounts held in the name of employees of granite exporters, in which cash received against the illegal granite exports was being deposited, were found. Search action also led to detection of money being routed back from Chinese entities into the Indian entities in the form of hand loans (interest-free loans) without documents," the ED said.
These Chinese entities, it said, are "owned" by one Li Wenhuo, whose name appeared in the Panama leaks.
Dubbed 'Panama Papers', an investigation of a stockpile of records from Panamanian legal firm Mossack Fonseca by the Washington-based International Consortium of Investigative Journalists (ICIJ) in 2016 had named several world leaders and celebrities who allegedly stashed away money abroad in offshore companies.
Some of them hold valid overseas accounts.
The FEMA probe was initiated after the ED took cognisance of a report prepared by the state vigilance and enforcement department which said that "large-scale evasion of Seigniorage fee on granite blocks transported from the quarry lease areas of Karimnagar district to the seaports by railways was detected and demands for the evaded royalty were raised but not paid by the exporters."