FEMA 'violation': ED seizes properties worth Rs 41.64 crore of Zavareh Poonawalla

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The Enforcement Directorate (ED) has seized three immovable properties worth Rs 41.64 crore under the provisions of Foreign Exchange Management Act (FEMA) during a probe against Zavareh Soli Poonawalla and his family members.

The properties are located at Ceejay house, Worli in Mumbai.

The ED is investigating a case of misuse of Liberalized Remittance Scheme (LRS) under the provisions of the FEMA against Zavareh Soli Poonawalla and his family. His name was found in the Panama Papers revelations regarding off-shore entities

The ED investigation has established that Poonawalla and his family members had remitted foreign exchange abroad by mis-utilising the provisions of LRS scheme.

"They used the maximum permissible limit and from the year 2011-12, they remitted money abroad via mis-declarations under the pretext of `family maintenance and self-maintenance`, however none of their family members was residing abroad or holding NRI status," the ED said.

The entire funds remitted by Poonawalla and his family members under LRS were invested into Stallast Limited based in BVI.

The funds remitted by Poonawalla and his family members were utilised by Stallast Limited to purchase four properties in the UK. These properties include four apartments at Paddington, London. Multiple FEMA contraventions were seen in these transactions, the agency said.

According to ED, apart from mis-declarations in the remittances, Poonawalla and his family members wrongly claimed these investments as foreign portfolio investments; in reality, the foreign entity was completely controlled by them. The foreign assets, which they continue to possess, were not declared to RBI.

"The properties abroad were acquired through the funds remitted under LRS to avoid reporting requirements to RBI and thus, Zavareh Poonawalla has mis-utilised the LRS. Therefore, the equivalent value of properties held by them in India have been seized under the provisions of Section 37A of FEMA," the ED said.

Further investigation in the matter is on.