Enforcement Directorate (ED) has attached assets worth Rs 48 crore belonging to Sintex Industries in connection with its foreign exchange violation probe into Panama Papers case. The attachment was made following a probe into floating of offshore entity Amarange at British Virgin Islands by Sintex owner Rahul Patel.
“The names of Shri Amit Patel and Shri Rahul Patel had figured in the Panama Papers case with respect to their stakes/interests in M/s Amarange Inc., BVI. Accordingly, investigations under Foreign Exchange Management Act (FEMA), 1999 were initiated by the Enforcement Directorate,” an ED statement said.
On April 7, 2016, The Indian Express reported that Patel — one of the three managing directors of Sintex Industries Ltd, an Ahmedabad-based company that has made a name for itself in manufacturing water tanks — is among promoters of the company listed on Bombay Stock Exchange. Panama Papers show Patel was a director with a BVI entity named Amarange Inc which was registered in 2008. The company was struck off the Mossack Fonseca records in 2014. The purpose for which it was set up has been recorded as: “Investments and for holding real estate in Singapore”.
The ED said its probe found that the accounts of the firm, through its subsidiary in the BVI, was used to purchase an immovable property in Singapore in alleged contravention of forex laws and hence action was taken against them.
The firm, it alleged, also violated other FEMA provisions. “Sintex Industries Limited, Ahmedabad contravened the provisions of section 4 of FEMA, 1999 and a total amount of USD 3 million and SGD (Singapore Dollar) 62,50,000 (equivalent to Rs 48,87,22,500) is still being held outside India as a result of the said transfers,” ED said. Hence, it said, the firms’ equivalent assets in India were seized under section 37A of FEMA law.
Contacted by The Indian Express in 2016, Rahul A Patel said: “We have a number of companies registered abroad. I am not sure if Amarange Inc is still ours.”
In response to the questionnaire sent to Patel, MD, Sintex Industries Amit D Patel said over phone: “We acquired this (Amarange Inc) in 2007. When you acquire a company, you need to hold it outside India and then repatriate the dividends to India. So it is done with RBI permission and guidelines. We also borrow money there and send money outside India to fund our acquisition and we also get dividends from those companies into India. It (Amarange Inc) is part of our balance sheets and we also disclose (information about) it in our balance sheets since 2007. We keep on creating and closing these companies as and when the acquisition opportunities arise.”