ED attaches Zavaray Soli Poonawalla’s assets worth ₹41.64 crore in Worli

The Enforcement Directorate (ED) on Monday seized three immovable properties worth ₹41.64 crore belonging to Zavaray Soli Poonawalla, brother of Serum Institute of India (SII) chairman and managing director Cyrus Poonawalla, and his family members in connection with a foreign exchange violation probe linked to the Panama Papers, the agency said on Monday. The attached assets are in Ceejay House, Worli.

The agency alleged that Zavaray Soli Poonawalla and his family members had misused the Liberalised Remittance Scheme (LRS) under the provisions of the Foreign Exchange Management Act (FEMA), 1999.

To be sure, the FEMA action against Zavaray Poonawalla has nothing to do with SII or Cyrus Poonawalla.

“The ED is investigating a case of misuse of LRS under the provisions of the FEMA, 1999, against Zavaray Soli Poonawalla and his family. The agency’s investigation revealed that Poonawalla and his family members had allegedly used the maximum permissible limit,” and ED officer said.

“From 2011-12, they had remitted money abroad via mis-declarations under the pretext of family maintenance, self-maintenance, etc., though none of their family members were residing abroad or held the NRI status. The entire funds under LRS were invested into Stallast Limited based in the British Virgin Islands,” the officer said.

The funds remitted were allegedly utilised by Stallast Limited to purchase four properties in the United Kingdom, including four apartments at Paddington, London. The ED probe revealed multiple FEMA contraventions in these transactions, the officer said.

Apart from the mis-declarations in the remittances, Poonawalla and his family members had wrongly claimed these investments as foreign portfolio investments, though in reality, the foreign entity was completely controlled by them, the ED officer said. The foreign assets were allegedly not declared to the Reserve Bank of India (RBI), according to the agency.

“The properties abroad were acquired through the funds remitted under LRS to avoid reporting requirements to RBI and thus, LRS was misutilised. Therefore, properties of the equivalent value held by them in India have been seized under section 37A of the FEMA,” the officer said.

The Panama Papers’ expose pertains to massive leak of financial files - over 11 million documents - in April 2016, from the database of Mossack Fonseca to German newspaper Suddeutsche Zeitung (SZ). The data revealed how politicians, celebrities, and businessmen across the world including several big Indian names had used the law firm for laundering money, dodging transactions and evading taxes.