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| Edited By: Aditya Kaul |Source: DNA |Updated: Mar 16, 2018, 06:58 AM IST
The Enforcement Directorate has found large-scale violations of the foreign direct investment (FDI) norms by Emaar MGF group, the real estate company whose premises were raided on Thursday.
Initial investigation shows that nearly 68% of the land bank of Emaar-MGF is agricultural.
“Most of this was purchased out of the FDI. This is in violation of the existing norms,” said a senior ED official.
Out of the 12,800 acres in its land bank, 8,700 acres is farm land. “We have questioned the managing director of the company and he has admitted to having diverted the money to buy agricultural land,” said a senior ED official.
Emaar MGF was permitted to bring in Rs7,000 crore to invest in real estate under an agreement cleared by the Foreign Investment Promotion Board. Putting money into agricultural land was ‘barred’.
Between 2005 and 2008, the company is believed to have brought in Rs6,000 crore.
The company is alleged to have purchased cheap agricultural land in Haryana, Punjab and Uttar Pradesh.
“We have seized all documents pertaining to these agricultural land purchases,” said a senior ED official. The diversion of FDI made by the company also includes purchase of an airplane by the group. During Thursday’s raids on 13 premises of Emaar MGF, the directorate seized nearly Rs9 crore in cash besides two kilograms of gold and foreign currency worth Rs5 lakh.
The group is also alleged to have floated more than 350 companies, a large number of them in Cyprus, Cayman Islands, Mauritius and Singapore.
“We found that huge amounts of money was routed and re-routed through these companies, in violation of existing norms,” said a senior ED official.
Several directors on these 350 companies were found to be low-grade employees of the group. Some of them have also admitted to investigators that they were directors only for namesake.
“Our documents indicate that the employees of the group with very low means were made directors of these companies,” said a senior ED official. Emaar MGF Land Ltd is a joint venture between Emaar group of Dubai and MGF Development Ltd of India.
The Emaar group claims to have operations in 16 countries. The group started its operations in India in February 2005.
