The Directorate of Enforcement (ED) has seized 9 immovable properties in Maharashtra and Karnataka worth INR 65.53 crore from M/s Venkateshwara Hatcheries Pvt Ltd (M/s VHPL) in accordance with the provisions of the Foreign Exchange Management Act (FEMA),1999.
The ED had launched an inquiry into the company’s unlawful transfers made since 2011 to its wholly owned subsidiary, M/s Venky’s Overseas Limited (M/s VOL), in the United Kingdom.
ED inquiry found that M/s Venkateshwara Hatcheries Pvt Ltd (M/s VHPL) reported M/s VOL’s business to RBI as Agriculture and Mining (Rearing of ducks, chickens, etc.).Following the establishment of M/s VOL, M/s VHPL remitted substantial amounts in the form of equity injection. Despite the fact that M/s VOL has been in existence for over 11 years, no such economic activity has ever been launched.
The ED inquiry further discovered that M/s VHPL has made remittances to M/s VOL totalling GBP 73,96,069, which is equivalent to INR 65.53 Crore from its formation to date. M/s VOL bought an immovable property entitled “Alexander House” with a total area of 90 acres in the United Kingdom shortly after its creation using cash paid by M/s Venkateshwara Hatcheries Pvt Ltd (M/s VHPL) in order to give convenience to the Directors and staff of VHPL. Furthermore, the money sent by M/s VHPL to M/s VOL were used to repay a loan received by M/s VOL from Barclays Bank, UK for the acquisition of such immovable property.
Investigation revealed that M/s Venkateshwara Hatcheries Pvt Ltd (M/s VHPL) had no intention of doing legitimate business through its subsidiary M/s VOL and that it was founded as a front to acquire immovable property in the UK for the ultimate benefit of M/s VHPL’s directors, staff, and family members. As a result, the equivalent value of properties held in India has been taken under FEMA Section 37A. More research is being conducted.
