Mumbai: ED attaches 3 properties worth Rs 41 cr of businessman named in Panama papers

New Delhi [India], May 8 : Three properties worth Rs 41 crores were seized by the Enforcement Directorate, under Foreign Exchange Management Act (FEMA) provisions, after the name of a businessman appeared in Panama papers regarding offshore entities, the agency said on Monday.

The properties have been seized from Ceejay house, Worli, Mumbai. The case pertains to the alleged misuse of Liberalized Remittance Scheme (LRS) under the provisions of the FEMA against Zavareh Soli Poonawalla and his family. His name was found in the Panama Papers revelations regarding off-shore entities, the agency said.

"The ED investigation has established that Poonawalla and his family members had remitted foreign exchange abroad by mis-utilising the provisions of the LRS scheme. They used the maximum permissible limit and from the year 2011-12, they remitted money abroad via misdeclarations under the pretext of 'family maintenance and self-maintenance, however none of their family members was residing abroad or holding NRI status," ED said.

As per the agency, the entire funds remitted by Poonawalla and his family members under LRS were invested into Stallast Limited based in BVI. The remitted funds were utilised by the company to purchase four properties at UK. These properties include four apartments in Paddington, London. Multiple FEMA contraventions were seen in these transactions.

Apart from mis-declarations in the remittances, Poonawalla and his family members wrongly claimed these investments as foreign portfolio investments, but in reality, the foreign entity was completely controlled by them and thus, they did ODI in a foreign WoS without due permission of the RBI. The foreign assets were not declared to RBI. They continued to hold above foreign assets till date and are in the continuous enjoyment of the same, it further said.

"The properties abroad were acquired through the funds remitted under LRS to avoid reporting requirements to RBI. Zavareh Poonawalla has mis-utilized the Liberalized Remittance Scheme. Therefore, the equivalent value of properties held by them in India have been seized under the provisions of Section 37A of FEMA," the agency added.

The ED has seized office space at Ceejay House, Worli, Mumbai, by passing an order under FEMA.

Further investigation in the matter is underway in the case.

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