The Enforcement Directorate (ED) has slapped a Rs 297 crore show cause notice on a Mumbai-based pharma company and few other financial institutions for alleged forex violations.
The firm, Plethico Pharmaceuticals, has been found to be allegedly contravening RBI norms for funding its business transactions.
The ED has issued a show cause notice under Foreign Exchange Management Act (FEMA) to the firm and few other financial institutions.
The contraventions are related to Foreign Currency Convertible Bonds (FCCB), a statement from the agency said.
The total forex contravention is pegged at Rs 297.07 crore, it said.
When contacted by PTI, the firm said the alleged contraventions were done "inadvertently" by it and it will cooperate with the probe agency.
"We have raised the funds through FCCB to acquire US based Nasdaq listed company. For raising the funds, various solicitor's firm, financial advisors and Bank of Baroda (authorised dealer) was appointed for the purpose of legal documentation and liasioning," general counsel for Plethico Pharmaceuticals Devdutt Dhikle said.
"RBI has certain guidelines which has to be followed in terms of raising funds through FCCB and we believe that all the agencies involved in this transaction got the interpretation of draw down laid down by RBI guidelines wrong and that's how FEMA violation happened inadvertently and there was no intention whatsoever either on the part of company or the appointed agencies to violate any provisions of FEMA," Dhikle said in an email reply.
"However, the purpose for which money was raised through FCCB was utilised for the said purpose," the reply said.
The company is expected to reply to the notice in three months time. The ED begun its probe in this case two years ago.
