Enforcement blitz on Emaar MGF exposes major fraud
04 Dec 2009
The glitch-ridden preparations for the Commonwealth Games in New Delhi next year received another jolt on Thursday, when the Enforcement Directorate raided 13 premises of Commonwealth Games Village developer Emaar MGF Land Ltd over violation of the Foreign Exchange Maintenance Act (FEMA).
The investigator said in a statement that it had recovered about Rs9 crore in cash, 2kg of gold and foreign currency worth Rs5 lakh during the raids. Documents seized on the premises indicated "large-scale violations of FDI guidelines" to the tune of over Rs6,000 crore, ED said.
"The company has about 12,800 acres of land bank, out of which 8,700 acres is agriculture land. Most of this agriculture land has been acquired out of FDI, which is a violation," the official ED statement said. It said the managing director of the group had admitted that the FDI funds were used for purchasing agricultural land. (See: Cornered in Chaibasa, Koda puts up defiant face)
The ED statement further said that the real estate group had floated more than 350 companies including a large number of them in Cyprus, Caymon Islands, Mauritius and Singapore. A ''huge'' amount of money was found to have been routed and re-routed through these companies, it added.
Directors of Emaar MGF have been summoned on several occasions after the agency launched an inquiry against the firm on allegations that it purchased agricultural land in breach of foreign direct investment guidelines. Under FDI rules money brought into the real estate sector from outside the country cannot be used for buying agricultural land.
Emaar MGF has allegedly used the FDI money to buy agricultural land in Haryana and Uttar Pradesh cheaply for real estate projects.
