Shares held by an estate belonging to late Goa mining baron Anil Salgaocar have been seized under the foreign exchange law in a case of alleged holding of undeclared foreign assets worth Rs 5,718 crore, the Enforcement Directorate (ED) said on Wednesday.
It said a seizure order under Section 37A (1) of the Foreign Exchange Management Act (FEMA) has been issued. Through this order, the agency said in a statement, the "entire shareholding of late Anil Salgaocar which has been transferred to his Estate, in all 33 companies which varies from 0.1 per cent to 99.9 per cent, has been seized," it said. Salgaocar died in 2016.
The agency said the probe against Salgaocar was conducted after taking cognisance of the Panama Paper leaks and Pandora Paper leaks where it was alleged that Anil Vassudeva Salgaocar, a resident of Goa, had incorporated multiple BVI (British Virgin Islands) companies.
The 'Panama Papers' refer to an investigation of a stockpile of records from Panamanian legal firm Mossack Fonseca by the Washington-based International Consortium of Investigative Journalists (ICIJ) in 2016 and it had named several world leaders and celebrities, including Indians, who allegedly stashed away money abroad in offshore companies. The 'Pandora Papers' global leaks surfaced in 2021 after the ICIJ came out with a 2.94 terabyte data trove that allegedly exposed the offshore secrets of wealthy elites from more than 200 countries and territories including those from India.
The ED said Salgaocar owned mines in Goa and Karnataka and the iron ore produced by these mines were sold/exported through his Indian group companies exclusively to the SPVs (Special Purpose Vehicles) based 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.
The five BVI companies of Salgaocar derived profit amounting to around USD 690,650,641 (approximately Rs 5,718 crore) through Salgaocar's iron ore trading activities and the same was "not declared" to the Indian authorities.
Hence, by acquiring foreign exchange and holding assets outside India, late Anil Salgaocar contravened the provisions of section 4 of the FEMA, 1999 for a total amount of USD 69,06,50,641, it said.
The 33 companies of Salgaocar's estate own 441 immovable properties that are located mainly in Goa and a few in Maharashtra (Mumbai) and Karnataka.
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