Tag: FEMA

Delhi Court allows ED to quiz Kashmiri businessman in Terror funding case.

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A Delhi court today allowed the Enforcement Directorate to interrogate a Kashmiri businessman in connection with a terror funding case involving LeT chief and 26/11 Mumbai attack mastermind Hafiz Saeed to unearth the money trail.

Additional Sessions Judge Tarun Sherawat allowed the application filed by ED’s counsel Nitesh Rana seeking permission to quiz Zahoor Watali, an influential businessman allegedly having friendship with Pakistani leaders and Kashmiri separatists, for two days – March 19 and 20.

Watali, who was arrested by the National Investigation Agency (NIA) on charges of receiving funds from Pakistan to sponsor terror activities and stone-pelting in Kashmir, is at present lodged in Tihar jail.

He is said to be close to hardline separatist leader Syed Ali Shah Geelani.

In its application, the probe agency said it was conducting an investigation under the provisions of the Foreign Exchange Management Act (FEMA) against Watali for allegedly receiving funds from abroad.

“In the course of the investigation under the Prevention of Money Laundering Act (PMLA) and the FEMA, the interrogation of accused Zahoor Ahmad Shah Watali is required along with recording of separate statements under the PMLA and the FEMA,” it said.

A charge sheet was filed by the NIA in January this year against Hafiz Saeed, Hizbul Mujahideen leader Syed Salahuddin and others for “conspiring to wage war against the government” and fomenting trouble in the Kashmir Valley.

The court had on February 2 taken cognisance of the charge sheet.

The 12,794-page charge sheet also alleged that officials of the Pakistan High Commission here were passing on money through Watali to the separatists.

The separatist leaders have been accused of taking a cut before handing over the money to foment trouble.

Saeed has also been accused of using the services of Watali for passing on the money to the separatists and some individuals who were actively indulging in stone-pelting in various areas of the Valley, the NIA said in the charge sheet.

The agency has charged Pakistan-based terrorists Saeed and Salahuddin, besides others, with criminal conspiracy, sedition, and under stringent provisions of the Unlawful Activities (Prevention) Act.

It said 60 locations were raided and 950 documents seized. There are 300 witnesses in the case.

Besides Saeed, Salahuddin and Watali, the agency has also named hardline pro-Pakistan separatist Syed Ali Shah Geelani’s son-in-law Altaf Shah alias Altaf Fantoosh, Bashir Ahmad Bhat and Javed Ahmad Bhat as accused.

Hurriyat Conference leaders Nayeem Ahmad Khan, Farooq Ahmad Dar alias Bitta Karate, Mohammad Akbar Khanday and Raja Mehrajuddin Kalwal have also been charged by the agency in the terror funding case.

Saeed, Salahuddin and their Pakistani handlers informed people about the agenda of violence through “protest calendars”, the charge sheet said. These calendars were released through newspapers, social media and religious leaders, according to it.

These acts were aimed at creating an atmosphere of terror and fear in Jammu and Kashmir, the charge sheet alleged.

It claimed money was also routed through fake and bogus companies floated abroad and remitted to the Hurriyat leaders in J and K.

Delhi HC pulls up ED over seizure of Qureshi’s wife’s passport

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Delhi HC pulls up ED over seizure of Qureshi's wife's passport
Delhi HC pulls up ED over seizure of Qureshi’s wife’s passport

The Delhi High Court today pulled up the Enforcement Directorate (ED) for seizing the passport of controversial meat exporter Moin Qureshi’s wife summoned in connection with a money laundering probe against her husband.

Justice Vibhu Bakhru questioned the authority of the law enforcement agency to impound the passport.

“This is not the way, a body should function,” the court said and directed that the officer who had impounded the passport of Qureshi’s wife, Nasreen Moin Qureshi, be present before it on the next date.

“I would examine him,” the judge said, adding that “prima facie” it was very difficult to accept the ED’s submission that the woman had voluntarily handed over her passport to the agency.

Irked by the ED’s step, the judge was of the view that the agency should return the woman’s passport today itself and let the ministry concerned and the passport officer take steps in accordance with the law.

The court, however, restrained itself from giving such a direction and asked the ED’s officer concerned to remain present before it on the next date of hearing on August 2.

The court also directed the ED officer to file his personal affidavit within a week from today.

The direction came on Nasreen’s plea, who through her counsel R K Handoo, has sought a direction to the Centre, the ED and the authorities concerned to immediately hand over her original passport impounded by the agency in December 2016.

In her petition, she has also sought quashing and setting aside of the Look Out Circular (LOC) issued by the ED against her.

The woman has urged the court to award her a Rs 10 lakh compensation on the ground of the humiliation and mental and physical agony she had faced due to the ED’s action.

The plea said that her fundamental rights have been violated and therefore, action must be taken against the officials of the ED for illegally impounding the passport and issuance of the LOC.

The ED, on the other hand, defended its decision, saying the wealth and life style of Nasreen’s husband and his family was disproportionate to the declared sources of income.

The agency also claimed that it was noticed that she and her daughter were incurring expenses on hotel accommodation, purchase of merchandise and other expenses on a very large scale at foreign destinations and the “payments were settled through money transfer by hawala channels”.

ED’s lawyer, Ajay Digpaul, submitted that the violation of the Foreign Exchange Management Act (FEMA) was detected during investigations against the petitioner, her husband and daughter for which investigation was separately initiated under the Act.

“After receipt of intelligence input that the petitioner (Nasreen) might escape from the country, the LOC was issued on October 25, 2016,” the agency said in its reply.

It said that Nasreen was also summoned for questioning in connection with the Prevention of Money Laundering Act (PMLA) case against her husband.

“There is every likelihood that Nasreen or any of her family members will try to dispose of their properties at a foreign destination. Hence, the action of the LOC was initiated,” it added.

Qureshi, who returned to India in November last year, has been questioned multiple times here by the agency in the money laundering and hawala dealings case.

The agency had asked him to join the probe citing a court-issued directive in this regard.

The Delhi High Court, while hearing a plea filed by Qureshi, had in November last year directed him to return to India by mid-November and appear before the agency for questioning in this case.

The meat exporter is facing probes by ED as well as the I-T department.

( Source – PTI )

SC nod to Sahara to proceed with foreign loan transactions

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The Supreme Court on Friday allowed Sahara Group to go ahead with its proposed transactions for a loan of around US dollar 1,050 million from abroad for raising Rs 10,000 crores to ensure release of Subrata Roy from jail.

However, the apex court put conditions including the approval of RBI for the transfer to India the funds raised in the US to meet the requirement set for release of Roy, who is lodged in Tihar jail for over nine months for non-refund of over Rs 20,000 crore with interest to depositors.

The apex court, which had asked 65-year-old Roy to pay Rs 10,000 crore to get bail, out of which Rs 5,000 crore should be paid in cash and rest in bank guarantee, today extended its August 1 order for conference facility for him in Tihar jail to deal with the nitty-gritty of transaction till February 20.

A Bench headed by Justice T S Thakur passed the order after market regulator SEBI and senior advocate Shekhar Naphade, who is assisting the court as an amicus curiae, agreed with the plea of Sahara that “there was no risk for the court in allowing the transaction for the loan”.

“In the circumstances and keeping in view the submissions of counsel for SEBI and amicus curiae and other safeguards, there is no reason why we do not allow the prayers,” the bench, also comprising Justices A R Dave and A K Sikri, said while making it clear that permission for transaction of loans would be subject to certain conditions.

The bench said Sahara will move the Reserve Bank of India (RBI) at appropriate level or before its competent authority and make representation for suitable clarification for bringing the amount arranged in the US and deposit it in the account of Aamby Valley Ltd, Mauritius, a fully owned subsidiary of Sahara India’s Aamby Valley Ltd.

Further, the bench said the entire loan amount generated from the US shall be deposited with Aamby Valley Ltd, Mauritius and shall not be utilised or transferred by the Indian subsidiary, for any other purpose except for being deposited with SEBI in the SEBI-Sahara refund account.

Thirdly, the bench made it clear that Sahara will not be free to claim any equity on the amount raised as loan from overseas and deposited with Aamby Valley Ltd, Mauritius, for the purpose of bailing out Roy from jail.

Out of the amount of 1050 million USD, Sahara has been allowed to raise a junior loan of 650 million USD and 400 million USD in investment from Mirage Capital Llc.

The submissions in this regard was made by Sahara’s counsel S Ganesh, Rajiv Dhavan and Keshav Mohan. They had submitted that Sahara be allowed for taking over of the Bank of China loan on foreign Hotels by another creditor.

Roy was sent to jail on March 4 last year along with two other directors Ashok Roy Choudhary and Ravi Shankar Dubey.

The court during the last hearing had clarified that legal impediments in the transfer of money from escrow account of foreign bank agent requires special permission by competent authority under the Foreign Exchange Management Act (FEMA).

The issue had cropped up after amicus curiae had submitted that the legal requirement for external commercial borrowing requires clearance under FEMA which has not been complied with by the Sahara Group.

Sahara had said there was no requirement of RBI approval under the FEMA regulations in the concerned transaction.

The court was hearing the issue of Sahara seeking its nod for raising ‘junior loan’ of USD 650 million (approx. Rs 3,600 crore) as a part of the scheme to overcome the liability with Bank of China which had lent money to it in purchasing stakes in three overseas hotels, Dream Downtown and The Plaza in New York and Grosvenor House in London.

Sahara had also informed the bench that escrow account has been shifted to Bank of America.

Sahara on December 17 last had handed over to SEBI cheques amounting to Rs 1,900 crores relating to sale of domestic properties.

The apex court on December 2 had permitted the Sahara Group to proceed with the sale of four domestic properties, which is likely to fetch Rs 2,710 crore, in its bid to raise Rs 10,000 crore for the release of Roy.

The court had allowed the group to sell properties in Jodhpur, Pune, Chauma in Gurgaon and Vasai in Mumbai after it was satisfied that the transactions were in accordance with its June 4 order.

The bench was told that there are some problem in selling the Pune property which would likely to fetch Rs 550 crore.

Earlier the court was told that the transactions for these properties would be completed by May 2015 and in the meantime, the purchasers would deposit post-dated cheques in the name of SEBI-Sahara refund account with undertakings that those would be honoured on due dates.

Out of the list of nine domestic properties, Sahara has already sold its Ahmedabad property and has raised Rs 411.82 crores which has gone into the account of SEBI.

Sahara, which earlier had raised Rs 3,117 crore and deposited with SEBI, has told the court that out of nine domestic assets it has now sold an Ahmedabad property and raised Rs 411.82 crores which has also gone into account of the market regulator.

Earlier, SEBI had moved the court seeking its direction to Sahara group to give a time schedule for payment of Rs 47,000 crore to it.

HC orders restoration of Lalit Modi”s passport

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lalit modiPaving the way for the return of suspended Indian Premier League (IPL) chairman Lalit Modi to India, the Delhi High Court Wednesday ordered the restoration of his passport.

A division bench of Justice B.D. Ahmed and Justice Vibhu Bakhru allowed Modi’s plea challenging the revocation of his passport.

The regional passport office in Mumbai had revoked Modi’s passport March 3, 2011, following an Enforcement Directorate probe into allegations of financial irregularities in the IPL.

Modi is facing cases under the Foreign Exchange Management Act (FEMA) related to the IPL and his presence was required before the Enforcement Directorate.

The bench said it was not expressing any opinion with regard to the alleged FEMA violations by Modi, who is currently in Britain.

The bench held that the revocation order was invalid.

“We must examine the direct and inevitable consequence of the revocation order. At the time the revocation order was passed, the appellant was already abroad in Britain.

“The direct consequence of the revocation order was that the appellant (Modi) could not travel to any country outside of Britain.

“He could not attend any conferences or meetings in any other country where he could have expressed his views on cricket or on the organisation and administration of cricket.

“To that extent, it can be said that the ‘direct and inevitable’ consequence of the revocation order was to impinge upon his freedom of speech and expression,” the judgment said.

“Now, this could be legitimate if the revocation order could be said to be in the interests of the general public, of course, limited to the interests of ‘public order, decency or morality’.

“The alleged infraction on the part of the appellant (Modi) could hardly be stated to fall foul of ‘public order, decency or morality’. Therefore, in our view, the revocation order was invalid,” the court said.

Modi, who has been elected president of the Rajasthan Cricket Association but remains banned by the Board of Control for Cricket in India (BCCI), had challenged the single bench order of Jan 16, 2013 that dismissed his plea challenging the revocation of his passport.

The Enforcement Directorate had made a request to the Regional Passport Office in Mumbai that Modi be either called back or his passport be revoked.

(Source: PTI)

Supreme Court refuses to interfere in FDI in retail policy

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In Delhi The Supreme Court refused to interfere with the policy on FDI in retail saying that if it does not stand in Parliament then it would be at government’s peril.

A bench of justice RM Lodha and AR Dave told that the policy making is the “sole prerogative of the executive” and refused to direct the government to place it in the Parliament saying that the Centre might do it on its own in the coming winter session.

It also told that apprehension that the Centre would not place it before the Parliament is “unfounded” and posted the matter for hearing on January 22 after winter session of the Parliament.

“You (petitioner challenging FDI policy)are assuming that it won’t be placed before the Parliament. Your assumption is ill-founded. We would know about it only after the winter session of the Parliament… Lets see whether it is placed before the Parliament or not and then we will see”

“They are at their own peril. They can take risk. If their action action does not stand in Parliament then they made policy at their own peril,” the bench observed when the petitioner contended that the apex court should intervene in the case as a Parliamentary committee has also given opinion against FDI in retail sector.

Section 48 of The Foreign Exchange Management Act, 1999 says that every rule and regulation made under this Act in order to allow FDI shall be laid before each House of Parliament.

According to the bench the Executive has right to frame policy and it had been “mandated” to rule the country but it has to listen to the Parliament which it is accountable to.

“Policy formulation is the sole prerogative of the executive. Parliamentary committee may advise as philosopher and guide. But what is good is to be decided by the executive. Executive must listen to the Parliament as it is accountable to the Parliament”

“Executive is entitled to have their own perception. It has been mandated to rule,” the bench said adding “We have not said that economic policy must be beyond the judicial review but court should be extremely slow in interfering in policy matters.”

The court was hearing a PIL filed by lawyer ML Sharma, challenging Centre’s policy allowing FDI in retail sector.

In the meanwhile the Attorney General informed the bench that RBI has amended the Foreign Exchange Management Act (FEMA) regulations to allow implementation of the government’s policy and it has also been notified.

The lawyer also challenged the constitutional validity of the provision under which companies would be allowed to operate in the country despite not getting approval of the Parliament.

The bench said that it will hear his contentions and the Attorney General on this aspect if it was necessary and adjourned the case.

On the last hearing on October 15 the had refused to stay the Centre’s decision to allow FDI in retail sector saying that the policy suffers from “curable” irregularity of want of legal sanction and asked the RBI to amend the FEMA regulations to allow implementation of the government’s policy.

Sharma has said in his petition that that retail trading is strictly prohibited under the law of FEMA under which the power to come out with a circular is vested with the RBI which has not issued any regulation after 2008.

He has alleged in his PIL that the Centre’s notification was issued without the authority of law as approval of neither the President nor the Parliament was secured.

 

B PTI

Reebok booked for violation of FEMA by ED

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Reebok has been booked for alleged Foreign Exchange Management Act (FEMA) violations by the Enforcement Directorate (ED). Reebok may face penal action and money laundering charges for running unauthorized retail outlets as well as breach of export commitments.

Reebok India — now a subsidiary of the German sports goods-maker Adidas.

Sources said the ED has registered a case for alleged FEMA violations against Reebok India as the firm failed to keep its commitment to export goods worth Rs 8,000 crore in the first 10 years of its operations.

 The commitment not to engage in retail sales and to meet export commitments were the twin grounds on which Reebok was allowed to start operations in India. Besides, the company also promised not to import goods that could be manufactured locally.

However, sources in the ED claim that their investigations revealed Reebok India hardly manufactured any goods locally, imported most of its wares from its manufacturing units based in south-east Asia.

 A Reebok India spokesperson confirmed the ED case against the company, saying, “We are extending full cooperation to the authorities in their investigation. Please understand that we cannot share any further details since the matter now rests with the Indian law enforcement authorities.”

 The company recently was in news when it claimed that it detected irregularities of Rs 870 crore in its India operation. It has since registered an FIR with the economic offence wing of Haryana and announced closure of hundreds of its retail outlets.

 The ED probe into whether the company allegedly violated FEMA guidelines to start a countrywide retail chain predates company’s complaint to Haryana police. By the time company reported the fraud in its India operation, the international taxation division of the income tax department had carried out an exhaustive audit on the business operations of Adidas’s Indian subsidiaries and called for its tax returns for scrutiny.

 The Serious Fraud Investigation Office in the corporate affairs ministry has also initiated a probe against Reebok India and sought details of company’s complaint that retail outlets were started unauthorized by those responsible for company’s India operations and who have since been removed.

ED to question Jagan for 14 days

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The CBI court today allowed ED to interrogate Jagan, as the parliament member from Kadapa is popularly known, in Chanchalguda Central Jail for 14 days in illegal assets case.

The court, which had July 2 reserved its orders on the ED plea, permitted the central agency to question Jagan from July 7 to July 21.

The ED officials will grill Jagan in the presence of his lawyer every day from 10 a.m. to 5 p.m.

The CBI court rejected the objections raised by Jagan to the ED petition. In his counter, the MP urged the court to dismiss the petition.

Jagan argued that he is no longer chairman or director of Jagati Publications, the investments into which are under the ED scanner.

Jagati Publications, which publishes Telugu daily “Sakshi”, reportedly received investments from firms based abroad in return for the favours doled out to them by the then government of Jagan’s father Y.S. Rajasekhara Reddy.

The ED has already booked Jagan for alleged violations of Prevention of Money Laundering Act (PMLA) and Foreign Exchange Management Act (FEMA).

The ED last month questioned industrialist Nimmagadda Prasad, suspended bureaucrat B.P. Acharya and another bureaucrat K.V. Brahmananda Reddy in Chanchalguda Central Jail here in the same case.

Jagan was arrested by the CBI on May 27. The high court on July 4 dismissed his bail petition.