The Directorate of Enforcement (ED) has seized three immovable properties in Worli, Mumbai, for a total of Rs 41.64 crore under the provisions of the FEMA 1999 in its probe of Zavareh Soli Poonawalla and his family members.
The ED is investigating Zavareh Soli Poonawalla and his family for misusing the Liberalised Remittance Scheme (LRS) under the terms of the FEMA 1999. His identity was discovered in the Panama Papers allegations about offshore corporations. An inquiry by the ED found that Zavareh Soli Poonawalla and his family members had sent foreign currency overseas by abusing the terms of the LRS programme.
They used the maximum legal limit and, beginning in 2011-12, transferred money abroad under the guise of ‘family support and self-maintenance,’ despite the fact that none of their family members resided abroad or held NRI status.
The cash sent by Zavareh Soli Poonawalla and his family members through LRS was invested in M/s Stallast Limited, which is situated in the British Virgin Islands. M/s Stallast Limited used the monies sent by Zavareh Soli Poonawalla and his family members to acquire four homes in the United Kingdom. Four of these homes are in Paddington, London. Multiple FEMA violations were observed in these trades.
Apart from mis-declarations in remittances, Zavareh Soli Poonawalla and his family members incorrectly claimed these investments as foreign portfolio investments, when in fact, the foreign entity was completely controlled by them, and thus they did ODI in a foreign WoS without the RBI’s permission. The overseas assets had not been reported to the RBI. They have continued to keep the aforesaid overseas assets and are still enjoying them.
The properties overseas were purchased with cash transmitted under the LRS in order to dodge reporting obligations to the RBI, and so Zavareh Poonawalla abused the Liberalised Remittance Scheme. As a result, the equivalent value of their assets in India has been taken under the terms of FEMA Section 37A. On 8.5.2023, the ED seized office space at Ceejay House in Worli, Mumbai, after issuing an order under FEMA 1999. More research is being conducted.
