ED seizes late Anil Salgaocar’s shares over foreign exchange law violations

The Enforcement Directorate (ED) has seized late mining baron Anil Salgaocar’s shares for allegedly violating the Foreign Exchange Management Act (FEMA).

In a statement, the agency on Wednesday said it initiated an investigation against Salgaocar on the basis of Panama Papers and Pandora Papers leaks that alleged Salgaocar incorporated multiple British Virgin Islands (BVI) companies.

“The entire shareholding of Late Anil Salgaocar which has been transferred to [the] Estate of Late Anil Salgaocar, in all 33 companies which varies from .1% to 99.9% has been seized by ED. These said 33 companies own 441 immovable properties located mainly at Goa and few at Mumbai and Karnataka.”

Salgaocar, who was also a member of the Goa assembly, passed away in 2016 in Singapore. His sons Sameer and Arjun Salgaocar have taken over their father’s businesses. Their representatives declined to comment.

ED said Salgaocar owned iron ore mines in Goa and Karnataka. It added iron ore they produced was sold/exported through Indian group companies exclusively to the Special Purpose Vehicles (SPVs) in BVI and Singapore.

“These SPVs were not declared before Indian authorities and they acted as trading companies indulging in [the] sale of iron ore produced in India to China which resulted in profit shifting outside India,” the ED said.

It added of Salgaocar’s five BVI companies derived profit amounting to around $690,650,641 (around ₹5718 crore) through iron ore trading activities. “The same was not declared before the Indian authorities.”

ED said Salgaocar contravened provisions of FEMA by acquiring foreign exchange and holding assets outside India.

Sameer and Arjun Salgaocar also faced a probe over illegal mining before a trial court discharged them. Their Salgaocar Shipping Pvt Ltd bagged a mining block in the auction held in Goa in December last year.