ED confiscates assets valued at Rs 22.02 crore from Rana Sugars Ltd for FEMA breach
Click to start listening
Synopsis
The ED has seized properties worth Rs 22.02 crore from Rana Sugars Ltd for violating FEMA regulations. The company allegedly retained foreign exchange outside India, contravening Section 4 of the Act, which requires repatriation of foreign exchange receipts.
Key Takeaways
- ED seizes assets worth Rs 22.02 crore.
- Company violated Foreign Exchange Management Act.
- Investigation related to GDRs issuance.
- Foreign exchange not repatriated to India.
- Further investigations are ongoing.
New Delhi, April 3 (NationPress) In a significant turn of events, the Directorate of Enforcement (ED), Jalandhar, has confiscated immovable properties valued at Rs. 22.02 Crore belonging to M/s Rana Sugars Ltd for breaching the Foreign Exchange Management Act (FEMA), 1999. The firm is accused of retaining foreign exchange outside India, violating Section 4 of FEMA, 1999, which stipulates that foreign exchange receipts must be repatriated to India.
This announcement was made by the ED in a press release on Thursday.
The ED commenced its inquiry under the provisions of FEMA, 1999, targeting M/s Rana Sugars Ltd, its promoters, directors, and other associated parties, regarding the issuance of Global Depository Receipts (GDRs) and the improper use of the full proceeds for the intended legitimate purposes. GDRs allow companies to raise capital in international markets, yet regulations demand that proceeds from these instruments must be used for their declared purposes.
Investigations showed that M/s Rana Sugars Ltd neglected to repatriate the complete sum acquired through GDRs. From the total GDR receipts, the company maintained $2.56 million (Rs 22.02 crore) outside India, which is a clear infringement of FEMA rules.
This foreign exchange was not returned to India as required, prompting the seizure of the company's assets.
The ED's actions were instigated by the company's non-compliance with FEMA regulations, which aim to govern the movement of foreign exchange into and out of India.
Section 4 of FEMA explicitly states that foreign exchange received by an Indian entity must be brought back to India and used for the stated purpose.
Currently, ongoing investigations are in progress to assess the full extent of the violations and any potential further legal actions.
