Illegal foreign holdings under ED scanner for FEMA violations

In a bid to tackle black money stashed abroad, the Enforcement Directorate (ED) has launched proceedings to identify illegal foreign holdings of wealthy persons. ED sources stated that they have identified illegal foreign holdings amounting to a contravention of section 4 of the Foreign Exchange Management Act (FEMA), 1999.

“Till now, such properties were purchased brazenly,” said a source privy to the development. The agency will initiate action against such illegal properties in the near future, the source said.

On January 17, the ED conducted searches at premises linked to former chief engineer of the Brihanmumbai Municipal Corporation (BMC) and recovered incriminating documents relating to a property in Dubai.

“The former BMC chief engineer stated that he purchased the property in Dubai at Park Island, Bonaire Marsa, admeasuring 89 square metre, for ₹70 lakh in 2012,” a statement by the agency read. “However, no documents confirming the value of the property could be furnished by him. He also could not explain the source of funds and mode of payment,” the statement added.

Meanwhile, the income tax (I-T) department conducted searches on January 19 on a group that has been on their radar for having substantial undisclosed foreign assets. The operation covered 13 premises in the National Capital Region (NCR) and as per an I-T statement, the searches led to “detection of undisclosed foreign assets worth more than ₹1,000 crore”.