New Delhi: The Enforcement Directorate (ED) on Thursday searched the offices and homes of several board members of Delhi-based real estate developer Emaar MGF Land Ltd in connection with alleged violations of the Foreign Exchange Management Act (Fema).
“Around 10-12 offices of Emaar MGF in Delhi and the National Capital Region have been raided,” said an official in the ED, who did not want to be named. “A minimum of Rs10-15 crore of cash was seized from two-three offices.”
Emaar MGF, currently preparing for an initial public offering, said the searches were routine.
“There was a routine search operation by Enforcement Directorate at some of our premises in Delhi today. We have fully cooperated with the investigation,” a spokesperson said in a phone text message. “Most importantly, as inaccurately reported in some media, the investigation has no link to Madhu Koda’s arrest. News related to this is meritless and frivolous.”
On December 1, a vigilance court remanded former Jharkhand chief minister Madhu Koda to 14-day judicial custody after his arrest for allegedly siphoning off state funds and building a business empire worth Rs4,000 crore.
The violation of Fema relates to Section 3 of the Act, the same ED official said, without elaborating. “It is related to money laundering and money transfer.”
Fema came into force on 1 June 2000. Section 3 of the Act prohibits dealings in foreign exchange except through an authorised person, according to information on the site of the finance ministry’s department of revenue.
Similarly, without the prior approval of the Reserve Bank of India, no person can make payments to any person resident outside India in any manner other than that prescribed by it.
The Act also restricts unauthorised persons from entering into any financial transaction in India as “consideration for, or in association with, acquisition or creation or transfer of a right to acquire any asset outside India.”
As per current norms, foreign direct investment (FDI) in real estate is allowed only in projects with a minimum area of 25 acres and for construction of development projects with a built-up area of at least 50,000 sq. m.
Emaar MGF is a joint venture between Dubai’s largest developer, Emaar Properties PJSC, and Delhi-based developer MGF Development Ltd. Emaar has a 42% stake in the joint venture.
The raid started at 9am on Thursday at Emaar MGF’s office on Kasturba Gandhi Marg. A notice outside the company’s office said it would be closed on Thursday and Friday “due to the sad demise of His Excellency S.K. Singh.”
Singh, the governor of Rajasthan, passed away on 1 December.
Raids at other offices were conducted simultaneously, the ED official said. The raids will continue till Friday evening, he said.