New Delhi: The Enforcement Directorate (ED) has issued a show cause notice amounting to Rs 206 crore against a Kolkata-based businessman Sanjay Jhunjhunwala. He has been accused of allegedly holding an undisclosed foreign bank account in Singapore. This is in violation of RBI rules and Foreign Exchange Management Act (FEMA). Sanjay Jhunjhunwala, builder and Mani Group promoter has been charged with ‘illegal dealings and trading in foreign currencies in Singapore, illegal external borrowings and unauthorisedly maintaining foreign bank accounts’. This was stated by the ED in a statement released Wednesday.
The Adjudicating Authority of the ED, an agency officer in the rank of special director, issued the show cause notice to the businessman. It was given for alleged contravention of the Foreign Exchange Management Act (FEMA).
“The show cause notice has been issued after an investigation carried out by Enforcement Directorate. The ED conducted the probe on the basis of an overseas input received from the Financial Intelligence Unit,” the agency said.
The agency said its probe found that ‘Jhunjhunwala unauthorisedly maintained individual foreign bank account with LGT Bank (Singapore) Ltd. He also made transactions in foreign currencies by huge borrowings in foreign exchange in contravention of the FEMA’.
“He also took money outside India under liberalised remittance scheme (LRS) which was also mis-utilised for such illegal speculative trading in various foreign currencies,” the ED alleged. For these transactions, it said, the businessman did not have any specific permission from the Reserve Bank of India (RBI). “The money was brought back by showing as unsecured loans,” the ED said.
The agency said Jhunjhunwala was the ‘beneficial owner’ of the account maintained at UBS, Singapore, in the name of Tiger Woods International, a company incorporated in the British Virgin Islands.
“Investigation found that he (Jhunjhunwala) purportedly entered into an un-incorporated joint venture agreement with a foreign national for investing in projects in India (like IT/ITES projects in Rajarhat new town),” the ED said, referring to Information Technology and IT-enabled Services.
“However, no such project work was undertaken. In the guise of the said joint venture agreement, he opened and operated foreign bank account abroad in the name of the said company to which Jhunjhunwala was the beneficial owner,” the ED said.