HSBC list: ED gets nod to attach Chennai businessman's assets

The Enforcement Directorate (ED) has got the final approval to seize a city-based industrialist's Rs 1.59 crore deposits, the amount equivalent to the value of his alleged assets stashed abroad, in connection with its probe into the HSBC black money list.
The central probe agency said it had got the approval of the competent authority -- the Commissioner of Customs (Appeals) -- for seizing the assets.
The agency had first seized the deposits in June this year under the recently-introduced section 37A(1) of the Foreign Exchange Management Act (FEMA) that empowers it to seize equivalent property in India, if there is a suspicion that any forex, foreign security or any immovable property located outside India is held in contravention of the Act.

This was the first action under the FEMA in the HSBC black money list.
"After due process of law, competent authority has confirmed the seizure of movable properties of about Rs 1.59 crore of Pradip D Kothari made by the ED under the newly introduced provisions...for holding foreign assets without proper approvals," the agency said in a statement.
The ED began probing Kothari in respect of credit of foreign exchange to the tune of USD 3,52,258 (about Rs 2.2 crore) that was "held" in HSBC Bank, Geneva, and was "suspected to be held outside India and thereby contravened the provisions of FEMA".

"During investigations, it was admitted that (this) amount was kept in the foreign accounts without proper permission from RBI and without declaring the same to tax authorities. Further, he (Kothari) could not produce any evidence to show that the amount was repatriated to India," the agency said.

This, it said, is a violation of the FEMA.
The case pertains to 628 Indians, who figured in a list of account holders in HSBC Bank's Geneva branch that India had obtained from the French government in 2007.
The ED had got these documents from the court after the Income Tax Department, which first obtained and probed the names in the list on charges of tax evasion, filed its prosecution in these cases.

The agency had also carried out a similar action a fortnight ago against the owners of a Delhi-based jewellery group as it seized funds worth Rs 7 crore in connection with its FEMA probe into the Panama Papers case.
Through the recent changes in the FEMA, the ED has been empowered to seize equivalent property in India, if there is a suspicion that any forex, foreign security or any immovable property located outside India is held in contravention of the Act.
This section or amendment was brought in FEMA in 2015 as part of the Union government's strategy to combat black money stashed abroad.