In accordance with Section 37A of the Foreign Exchange Management Act of 1999, the Directorate of Enforcement (ED) has frozen Rs. 3.94 Crore in the case of Pigeon Education Technology India Private Limited. Earlier in this case, the ED had already taken Rs. 8.31 crore. The total amount seized in the case under Section 37A of FEMA is, therefore, Rs. 12.25 Crore. The business operates an online learning platform called Odaclass. A corporation’s ownership by Chinese citizens is 100% exposed by ED searches against the company, and all business decisions, including financial ones, are made by people located in China.
The investigation further revealed that the Pigeon Education Technology company had transferred Rs. 82.72 crores to China and the Hong Kong Special Administrative Region of China under the guise of marketing and advertising expenses at the direction of Chinese director Liu Kan. However, the company was unable to produce any documentation attesting to its receipt of services or documentation attesting to the publication of any advertisements in connection with the said expenditures. In addition, the company’s director and accounts manager acknowledged throughout the examination that the payment was solely paid as per the requests of Chinese director Liu Kan.
The Pigeon Education Technology company’s Chinese and Indian directors both claimed to have been informed that the ad campaigns in question were published on Google and Facebook, however, neither director has provided any documentation to support this claim. Further research is now being conducted.
