ED seizes 1.6 cr from city bizman under FEMA

The release claimed the seized amount is equal to the value of alleged assets stashed abroad by the industrialist. The central probe agency stated that it has carried out the action under the recently introduced section 37A(1) of the Foreign Exchange Management Act (FEMA) that empowers it to seize equivalent property in India, if there is a suspicion that any forex, foreign security or any immovable property located outside India are held in contravention of the Act. 

“We have seized movable properties of about Rs 1.59 crore of Pradip D Kothari, Chennai, during investigations against the persons holding foreign assets without proper approvals,” ED officials said. 

They added that the ED began probing Kothari with regard to credit of foreign exchange to the tune of $ 352,258 (approximately Rs 2.2 crore at current rate) that was “held” in the HSBC Bank, Geneva, and was “suspected to be held outside India and thereby contravening the provisions of FEMA”.

During investigations, it was admitted that this amount was kept in the foreign accounts without proper permission from the RBI and without declaring the same to tax authorities. Further, he (Kothari) could not produce any evidence to show that the said amount was repatriated to India. The sum was seized from Kothari’s DEMAT account with Axis Bank Ltd, Mylapore branch, Chennai, under the provisions of Section 37A of FEMA. 

The case pertains to 628 Indians, who figured on a list of account holders in HSBC’s Geneva branch that India had obtained from the French government in 2007. The ED had got these documents from the court after the Income Tax Department, which first obtained and probed the names in the list on charges of tax evasion, filed its prosecution in these cases.