The liason office of Top Worth Investments, a Macau-based company, was searched by the Enforcement Directorate (ED) for suspected Foreign Exchange Regulation Act (Fera) violations. The office was searched on December 2 1997.
The company is alleged to have solicited Indians (residing in India) to open accounts in Macau and indulge in currency speculation.
The accounts are opened by the company after transferring the money of the Indian depositors through the havala route.
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Investigations revealed the existence of fifty such accounts with total deposits worth $20,000-50,000.
Top Worth Investments has been permitted by the RBI to open a liason office and the permission did not encompass any commercial and industrial activity by the Indian outfit. In Mumbai, the company activities are overseen by Edgar Lee, a British passport holder.
The company employs 100 agents who inducing customers to open overseas accounts.
These employees are paid a salary of Rs 5-7 thousand per month and are fired within two months if they fail to attract any customers.
When an Indian account holder places funds in the overseas account, Top Worth Investments charges a fee of $80 per transaction. The agent gets Rs 150 for the same.
The Enforcement Directorate alleged that, in addition to violating the terms and conditions of running a liason office in India, the company also encouraged Indians to indulge in Fera violations.
These Fera violations came to light when air cargo customs unearthed a duty drawback fraud of Rs 50 crore. The city based business Naval Bangur had withdrawn Rs 50 crore as duty drawback after submitting forged shipping bills to customs authorities.
Bangur and his sister-in-law Vinita Lakhotia hold accounts in Macau with Top Worth Investments where Bangur is said to have lost $300,000 in speculation.