ED slaps Rs 1000-crore FEMA notice on NRI businessman

The Enforcement Directorate (ED) has issued a fresh show-cause notice to NRI businessman C C Thampi for alleged violation of foreign exchange laws to the tune of over Rs 1,000 crore in the purchase of vast tracts of land in Kerala, official sources said today.
The central probe agency has issued the notice under provisions of the Foreign Exchange Management Act (FEMA), alleging contravention of Rs 1,014.75 crore by the businessman, his wife M Rodrigues and their companies.
The couple, under the scanner of the agency for their reported dealings with the families of some politicians and bureaucrats, are non-resident Indians and hence were not entitled to purchase land, they said.

The ED, in February this year, issued a similar show- cause notice to Thampi and his firms for alleged FEMA violation amounting to over Rs 288 crore in acquiring about 927 acres of land in Delhi and adjoining areas (national capital region).
"Further probe in case of Thampi's companies in Kerala revealed that he had adopted a similar modus operandi (like the Delhi-NCR land purchase instance) of forwarding loans to his companies and getting it converted into equity in his name and in the name of his family members and purchased land including agricultural land in the name of the companies," a source said.

The latest notice is for the FEMA violation amounting to Rs 1,014.75 crore and the land that he allegedly purchased in Kerala is over 594 acres.

The agency registered a FEMA case against Thampi and his associates last year.
The firms that are being investigated by the ED, as part of the two show-cause notices, include Holiday City Centre Private Limited, Holiday Properties Private Limited and Holiday Bekal Resorts Private Limited.
The ED earlier said that Thampi had "acquired huge agricultural land mass in Palwal and Faridabad districts of Haryana in the name of his company Holiday City Centre Pvt. Ltd. by circumventing the prescribed law of land and in contravention of extant provision of FEMA".

The probe revealed that Thampi was residing outside India and he had advanced unsecured loans to his three companies which was later converted into equity in his name and in the name of his family members in these companies, it had said.
Agency sources said the businessman was also under the scanner for his reported dealings with some politicians and bureaucrats.