ED Summons Mumbai Builder Niranjan Hiranandani and Son over Alleged FEMA Violation

Mumbai’s prominent builder, Niranjan Hiranandani, and his son Darshan Hiranandani have been summoned by the Enforcement Directorate (ED) for questioning on February 26th. The ED’s probe focuses on an alleged case of foreign exchange violation, specifically related to foreign direct investment (FDI) transactions involving the Hiranandani Group.

Key Points:

  1. Summons and Investigation: The ED has issued summons for Niranjan Hiranandani and his son Darshan, who has maintained non-resident Indian (NRI) status while residing in Dubai for the past 14 years. The investigation centers around a foreign exchange violation case, with the ED seeking answers to questions on Monday.
  2. FDI Case Documents: The ED has requested various documents related to an FDI case involving the Hiranandani Group. During an earlier search operation, documents were recovered, but some linked to the Panvel and Chennai FDI-related Foreign Exchange Management Act (FEMA) cases were reportedly missing.
  3. FEMA Violation Allegations: In the alleged FEMA violation case, the ED discovered that Hiranandani Group entities had purportedly received Rs400 crore through the FDI channel for housing projects in Panvel and Chennai. The investigation aims to ascertain if the utilization of these funds adhered to RBI guidelines, with a focus on potential fund diversions and regulatory non-compliance.
  4. Financial Irregularities: It has been revealed that a group entity within the Hiranandani Group failed to repay loans secured from a consortium of banks, resulting in its classification as a non-performing asset (NPA). Another entity took over an incomplete project through Debt Recovery Tribunal proceedings, prompting ED scrutiny for possible manipulation or irregularities.
  5. Offshore Entities: Sources indicate that the Hiranandani Group allegedly established at least 25 companies and a trust in the British Virgin Islands between 2006 and 2008. The ED is seeking details on these entities, including profiles, investments, and connections to Indian business group transactions.

In Shorts:

As the ED delves into the alleged FEMA violation and associated financial discrepancies within the Hiranandani Group, the summons to Niranjan Hiranandani and his son underlines the regulatory scrutiny surrounding foreign exchange transactions and FDI cases. The investigation aims to unravel the complexities surrounding fund utilization and offshore entities, shedding light on potential irregularities within the renowned builder’s business operations.

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