New Delhi, Nov 16 The Directorate of Enforcement (ED) has launched a major action against a Phagwara-based engineering exporter for alleged violations of the Foreign Exchange Management Act (FEMA), 1999, the central agency said on Sunday.
The searches, carried out on November 14 by the agency's Jalandhar Zonal Office, targeted four locations linked to M/s Opal Engineering Corporation (OEC), a firm engaged in the export of engineering goods.
According to the ED, the action was initiated after investigators detected serious discrepancies in how the company received its export proceeds.
OEC, which exported goods to countries including Syria, Iran, Turkey and Colombia, allegedly failed to realise export payments in accordance with FEMA guidelines and Reserve Bank of India mater circulars.
"ED investigation revealed that Opal Engineering Corporation exported goods to countries, viz. Syria, Iran, Turkey, Colombia, etc. However, the export proceeds were not realised as per guidelines prescribed under FEMA, 1999 and RBI Mater Circulars," the ED said in its press note.
The agency's probe has revealed that instead of receiving payments from its actual buyers abroad, the firm reportedly took funds from unrelated third parties based in various countries.
No tri-partite agreements or supporting documentation validating such adjustments were produced by the firm, the ED noted.
"The proceeds were adjusted against payments received from unrelated parties, from different countries and by taking payments into personal accounts. There were no tripartite agreements or any other documentary proof for adjustment entries from unrelated parties," the ED said.
Investigators also found that OEC allegedly relied on communication sent to a fake Customs email address to portray the transactions as genuine.
The ED claims that evidence collected during the searches suggests that several export-related financial settlements were conducted in cash, both within India and in foreign jurisdictions, raising further suspicion about the legitimacy of the transactions.
During the search operation, officers recovered Rs 22 lakh in Indian currency, along with "incriminating documents" and substantial "electronic evidence", all of which have been seized for further analysis.
The ED emphasised that the investigation is still underway.
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