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New Delhi, Nov 16 (IANS) The Enforcement Directorate (ED) has initiated major action against a Phagwara-based engineering exporter for alleged violations of the Foreign Exchange Management Act (FEMA), 1999. The central agency gave this information on Sunday.
The searches conducted by the agency’s Jalandhar zonal office on November 14 targeted four locations linked to M/s Opel Engineering Corporation (OEC), a company engaged in export of engineering goods.
According to the ED, the action was initiated after investigators detected serious discrepancies in the way the company received export earnings.
OEC, which exported goods to countries including Syria, Iran, Turkey and Colombia, reportedly failed to receive export payments as per FEMA guidelines and RBI miter circulars.
“ED’s investigation revealed that Opel Engineering Corporation had exported goods to countries like Syria, Iran, Turkey, Colombia etc. However, the export proceeds were not received as per the guidelines prescribed under FEMA, 1999 and RBI Miter Circular,” the ED said in its press note.
The agency’s investigation revealed that instead of receiving payments from its genuine buyers abroad, the company allegedly took funds from unrelated third parties located in different countries.
The ED said no tripartite agreement or supporting document validating such adjustment was produced by the firm.
“The income was adjusted against payments received from unrelated parties from different countries and by making payments into individual accounts. There was no tripartite agreement or any other documentary evidence for adjustment entries from unrelated parties,” the ED said.
Investigators also found that the OEC allegedly relied on communications sent to fake customs email addresses to make the transactions appear genuine.
The ED claims that evidence collected during the searches revealed that many export-related financial settlements were made in cash within India and in foreign jurisdictions, raising further doubts about the legality of the transactions.
During the search operation, officials recovered Rs 22 lakh in Indian currency, “incriminating documents” and substantial “electronic evidence”, all of which have been seized for further analysis.
ED emphasized that the investigation is still ongoing.
–IANS
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