The Enforcement Directorate (ED) today claimed to have found evidence of ‘large-scale’ violations of Foreign Direct Investment (FDI) guidelines by real-estate major Emaar MGF in purchase of land. During its searches carried out at 13 premises of the group on Thursday, the ED also claimed to have recovered about Rs 9 crore in cash, two kg of gold and foreign currency worth Rs 5 lakh. Stating that Emaar MGF had availed more than Rs 6,000 crore of FDI in the last four years, the ED said in a press statement that the seized documents indicated “large-scale violations of FDI guidelines.”
“The company has about 12,800 acres of land bank, out of which 8,700 acres of land is agriculture land. Most of this farmland has been acquired out of FDI, which is a violation,” the statement said. The ED claimed that the MD of the group “admitted that the FDI funds were used for purchasing agricultural land.” About the search operation, the group said it was “routine.” An Emaar MGF statement on Thursday said, “There was a routine search operation. We have fully cooperated with the investigation.”
The ED statement said the real estate group, a joint venture between Dubai-based Emaar Properties and India’s MGF Development, had floated more than 350 companies including a large number of them in Cyprus, Caymon Islands, Mauritius and Singapore. Huge amount of money was found to have been routed and re-routed through these companies, it said.
The ED also said, “The seized documents indicated that the employees of the group with very low means have been shown as directors of these companies.”
It said some of the employees who were directors in these companies “admitted” that they were directors only for namesake.
The group also appears to have diverted a large portion of FDI for other purposes including acquiring an aeroplane, it said. The searches come at a time when the group is planning to raise Rs 3,850 crore through an Initial Public Offer (IPO).
