Files on the recent searches carried out on Shaw Wallace & Co that appear to be related to violations of the Foreign Exchange Regulations Act (Fera) may be turned over to the enforcement directorate this week, said sources.
The directorate has picked up an alleged 'hawala link' in Kishore Chhabria's transactions with liquor baron Vijay Mallya's UB group, unearthed by the income tax authorities in relation with the former's acquisition of 26 per cent stake in Herbertsons Ltd in 1993.
Earlier in 1996, Chhabria had sold back his entire stake in the UB group company after a failed takeover attempt.
Apart from the Rs 7.75 crore that was officially paid by Kishore Chhabria to the UB group through six front companies, documents with income tax department are believed to have revealed that another $4.5 million was transferred through the hawala route.
This underhand deal was apparently carried out through the Kishore Chhabria-owned Rorquel Ltd, a company based in the Isle of Man, a tax haven.
However, during the hearings before the income tax authorities Kishore has denied having any association with Rorquel. The directorate of income tax (investigations) has also asked the enforcement directorate to investigate into the matter.
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The I-T authorities had conducted a search and seizure operation, similar to the one on Kishore's estranged brother Manu Chhabria's Shaw Wallace & Co last month, on the Kishore Chhabria group in ten cities simultaneously on August 2 last year.
The raids were initiated after a tip-off that Kishore Chhabria and his associates had indulged in large scale tax evasion and had amassed huge unaccounted money and assets.
After the two Chhabria brothers fell off on Manu's decision to oust Kishore from Shaw Wallace & Co, Kishore decided to side with Manu's arch rival Vijay Mallya, the owner of the UB group.
In 1993, Kishore Chhabria acquired 26 per cent stake in Mallya's Herbertsons Ltd.
The part of the transaction that was carried aboveboard was done through six K R Chhabria front companies which acquired 22,15,800 shares of Herbertsons Ltd.
Each share was purchased at Rs 35 per share, a discount over the then prevailing market, totalling Rs 7.75 crore.