ED seizes properties worth Rs 48.87 cr in Panama Papers Case

The Enforcement Directorate on Friday seized properties in the form of immovable assets worth Rs 48.87 crore from Ahmedabad-based company in connection with the Panama Papers case.

The agency seized the properties of M/s Sintex Industries Limited under section 37A of Foreign Exchange Management Act, 1999.

The names of Amit Patel and Rahul Patel had figured in the Panama Papers case with respect to their stakes/interests in M/s Amarange Inc., BVI following which the ED initiated probe.

During an investigation, it was revealed that during the period May 2007 to July 2009, M/s Sintex Industries Limited had remitted EURO 73.05 Million to M/s Sintex Holding BV, Netherlands (WOS), having one of its director as Amit Patel, as overseas direct investment.

Further, M/s Sintex Holding BV, Netherlands, had created a Wholly Owned Subsidiary namely Amarange Inc. which was incorporated in BVI having Amit Patel and Rahul Patel as its Directors.

Further, the aforesaid funds remitted as overseas direct investment by M/s Sintex Industries Ltd., were utilised by M/s Sintex Holding BV, Netherlands for acquiring a property in Singapore for an amount of SGD 7.9 Million in the name of M/s Amarange Inc. BVI.

In 2009 itself, M/s Sintex Holding BV, Netherlands attempted to sell M/s Amarange Inc., BVI to M/s Hanca Investment Ltd., BVI for the amount of USD 8.20 Million.

For the said purpose M/s Sintex Holding BV, Netherlands had received USD 3 Million but due to default in payment of the balance amount of USD 5.20 Million by M/s Hanca Investment Ltd., BVI, M/s Sintex Holding BV forfeited the amount of USD 3 Million and the share sale was annulled and Sintex Holding BV, Netherlands remained the beneficial owner of Amarange Inc., BVI.

Further, during 2017 the said property in Singapore has been sold for the amount of SGD 62,50,000 and consequently, Sintex Holding BV, Netherlands dissolved Amarange Inc, BVI on 08.08.2017, having engaged in no business or activity except for the purchase and sale of Singapore property.

Further, both these transactions of USD 3 million and SGD 62,50,000 were shown as income for M/s Sintex Holdings BV, Netherlands and never brought back to India.

Therefore, Sintex Industries Limited, Ahmedabad by doing the above act, contravened the provisions of section 4 of Foreign Exchange Management Act, 1999 and that a total amount of USD 3 Million and SGD 62,50,000 (equivalent to Rs. 48,87,22,500/-) is still being held outside India as a result of the said transfers.

Section 37A of FEMA, 1999 stipulates that if certain foreign exchange, foreign security or immovable property is held outside India in violation of FEMA, 1999 then value equivalent can be seized within India.

Accordingly, equivalent asset i.e. land admeasuring 109542 sq mt and 1830 sq mt amounting to Rs 48,87,22,500/- of M/s Sintex Industries Ltd, Ahmedabad in the form of Immovable assets are seized under section 37A of FEMA, 1999.

Further investigation is still under progress.