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3 firms get notices for FEMA violation

The Enforcement Directorate has issued show cause notices to two telecom companies and a real estate firm for alleged Foreign Exchange Management Act violations in the 2G scam

Written by Express News Service | New Delhi | Published: May 8, 2012 12:37 am

The Enforcement Directorate has issued show cause notices to two telecom companies and a real estate firm for alleged Foreign Exchange Management Act (FEMA) violations in the 2G scam.

The notices were issued to Virgin Mobiles,a joint venture of Tata group,Unitech Wireless Pvt Ltd and Milky Developers,a firm controlled by ETA star group. While Unitech has been issued notice for Rs 65 crore,Virgin is alleged to have committed FEMA violations for Rs 135 crore and Milky Developers for Rs 120 crore. The ED has given the firms a month to reply to the notices.

“As per the findings of the ED,the three firms have allegedly drawn foreign investment without intimating the RBI,defying the Foreign Direct Investment (FDI) policy,” said a top ED official. The firms can appear before the adjudicating authority of the rank of special director against the notices. “The forex contravention under FEMA is done by these companies by not reporting the receipt of funds from abroad within the stipulated period of time to the RBI,in not reporting issue of shares to foreign investor within stipulated period of time,and in purchasing shares of an Indian company from the funds of FDI,” added the ED official.

The ED probing the telecom companies under the FEMA and PMLA in the 2G scam has alleged that there was Rs 10,000 crore of FEMA violations by telecom firms after they were granted licences. Last year,the ED had charged telecom companies for FEMA violations to the tune of over Rs 4,300 crore. The companies which were charged by ED were Swan,Loop and S-Tel. Among them,Shahid Balwa-promoted Swan Telecom,committed FEMA contraventions to the tune of Rs 3,608 crore. In case of Loop Mobile,the ED alleged FEMA contravention to a total amount of Rs 431 crore.

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