Ed To Slap Notices On Swc Over Rs 70cr Suspected Fera Violations

The Enforcement Directorate (ED) will issue show cause notices to Shaw Wallace Company for suspected violation of the Foreign Exchange Regulation Act (Fera) amounting to over Rs 70 crore. These notices are expected to be issued to the company within a few weeks time.

The show cause notices to the liquor giant will be independent of the criminal prosecution case against Manu Chhabria, the Dubai-based chairman of the company, which was initiated by the ED in Delhi High Court for his non-response to several summon notices.

"The Directorate has enough evidence against Shaw Wallace to substantiate the FERA violation charges against the company which amount to over Rs 70 crore", said a senior revenue official.

 

The Calcutta branch of the ED, which will be preparing the draft show cause notices, will be forwarding it to the headquarters of the Directorate in Delhi within a few days. The final notices will be issued by the ED around the middle of next month.

"The criminal prosecution case against Manu Chhabria, which has already been lodged in the Delhi High Court, is a separate case. In fact, it's a diversion from the original FERA violation case against Shaw Wallace in which the Directorate has alleged that over Rs 70 crore has been illegally siphoned from the company", a senior revenue official pointed out.

In fact, the ED was earlier considering an alternative option to bring back Manu Chhabria into the country through "friendly persuasion" instead of initiating criminal proceedings against him. This was because the latter option would divert the thrust of the investigation away from the FERA violation charges.

However, since Chhabria refused to respond to any kind of persuasion by the ED, a criminal case was subsequently lodged against him for "non-response to the directorate's summons".

Regarding his refusal to respond to the summons, Chhabria had informed ED that his non-resident Indian status gave him protection from Indian laws, and that he is outside the purview of FERA.

At present, Chhabria resides in Dubai which does not recognise violation of FERA as an offence.

The ministry of law has already given clearance to the Directorate to pursue its investigations against Manu Chhabria reiterating the fact that non-resident Indians are covered by FERA. Views of the attorney general was also sought by the directorate in this issue which further clarified that Manu Chhabria can be summoned to the country for questioning in connection with FERA violation charges.