New Delhi, Sep 24 In a major crackdown on corporate entities, the Enforcement Directorate (ED) has conducted extensive search operations at 13 premises in Delhi-NCR and Hyderabad, targeting the group companies of B.C. Jindal and Shyam Sunder Jindal.
The searches, which took place on September 18 and 19, were initiated as part of a formal investigation into suspected violations of the Foreign Exchange Management Act (FEMA), 1999.
According to a press release from the ED, the probe focuses on allegations of suspicious overseas investments, round-tripping of funds, and the parking of money in foreign entities beneficially owned by the group.
The investigation was triggered by specific intelligence that the group entities had remitted a substantial amount, Rs 505.14 crore, out of India to their own overseas firm, Topaz Enterprise DMCC, in Dubai.
This transfer was reportedly disguised as an Overseas Direct Investment (ODI) to acquire shares in another foreign subsidiary, Garnet Enterprise DMCC.
The ED’s investigation has uncovered a series of complex financial manoeuvres.
Between fiscal years 2013 and 2017, Jindal Poly Films Ltd (JPFL), a publicly listed company, invested Rs 703.79 crore into Jindal India Powertech Ltd (JIPL), the ED said.
However, instead of recovering this investment, JPFL wrote it off and sold it at a significant loss to its own promoters and group companies. Subsequently, JIPL received Rs 853.72 crore from a different group company, Jindal India Thermal Power Ltd (JITPL), it further added.
From this amount, Rs 505.14 crore was allegedly siphoned off to Shyam Sunder Jindal's personal entity in Dubai.
The press release further details that the overseas transaction was based on a "sham valuation" of the foreign entity's shares.
It was found that two related valuers were hired to produce reports that enhanced the valuation, enabling the larger remittance.
During the searches, the ED recovered documents related to these overseas entities, confirming that Shyam Sunder Jindal is the beneficial owner of Topaz Enterprise DMCC and controls its finances.
The ED noted that Shyam Sunder Jindal was not in India at the time of the searches, having left for Hong Kong.
He has yet to return to the country or join the investigation.
The ED stated that further investigation is in progress to examine funds placed in multiple overseas entities held by the group across countries like the USA, Belgium, Italy, and Luxembourg.
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