A show-cause notice amounting to ₹206 crore has been issued to Kolkata-based Sanjay Jhunjhunwala, builder and promoter of Mani Group, for alleged illegal dealings and trading in foreign currencies in Singapore, illegal external borrowings and unauthorised maintaining foreign bank accounts, based on the Enforcement Directorate’s (ED) investigation. The probe carried out on the basis of an overseas input received from the Financial Intelligence Unit.

Investigation under the Foreign Exchange Management Act (FEMA) revealed that Jhunjhunwala was the beneficial owner of an account maintained at UBS, Singapore in the name of Tiger Woods International, a company incorporated in British Virgin Island. He had purportedly entered into an unincorporated joint venture agreement with a foreign national for investing in projects in India, such as the IT/ITeS project in Rajarhat New Town. However, no such project work was undertaken, a press statement issued by the ED said.

In the guise of the joint venture agreement, Jhunjhunwala opened and operated foreign bank account abroad in the name of the said company, of which he was the beneficial owner. Although no investment was made by Jhunjhunwala and no business was conducted by the joint venture, he clandestinely routed his ill-gotten money into India in the form of an arbitration award granted at Singapore, the ED investigation revealed.

Jhunjhunwala, without authorisation, maintained individual foreign bank accounts with LGT Bank (Singapore) Ltd and made transactions in foreign currencies by huge borrowings in foreign exchange in contravention of FEMA. He also took money outside India under the Liberalised Remittance Scheme, which was also misutilised for such illegal speculative trading in various foreign currencies. For these transactions, he did not have any specific permission from the Reserve Bank. The money was brought back by showing as unsecured loans, the ED stated.

Related Topics