ED Slapped 8600 Crore Rupees Show-Cause Notice on Emaar MGF Land for Violating FEMA

Jun 5, 2013 13:21 IST

The Enforcement Directorate (ED) slapped 8600 crore Rupees show-cause notice on Emaar MGF Land on the grounds that the joint venture between Dubai's Emaar Properties and India's MGF Development violated Foreign Exchange Management Act (FEMA).

The investigation conducted under FEMA, it was found that the Emaar MGF Land as well as its four subsidiaries received the funds from Mauritius, Cyprus, Dubai and other countries since April 2005 under foreign direct investment scheme of the Reserve Bank of India.

The foreign direct investment scheme of the Reserve Bank of India gives an advantage to the Indian companies under automatic route to receive funds from overseas for various business activities such as construction development projects. Under the facility, Emaar MGF Land Ltd as well as its subsidiaries needed to disclose the purpose of receiving this FDI. While disclosing the use of this FDI, Emaar MGF Land Ltd revealed that the funds were used for construction development projects, while in reality these funds were used for the purchase of agricultural land in India.

The directorate of enforcement explained that the company has violated the FEMA because it used the overseas funds for the purpose which was neither disclosed to the Reserve Bank of India, nor permitted in FDI scheme of RBI. The company, therefore violated the contravention of section 6(3) (b) of FEMA 99 for an overall amount of 8600 crore Rupees, due to which it was issued the show-cause notice.

Is this article important for exams ? Yes7 People Agreed
Read more Current Affairs on: Show-Cause Notice , Emaar MGF Land , FEMA

Latest Videos

Register to get FREE updates

    All Fields Mandatory
  • (Ex:9123456789)
  • Please Select Your Interest
  • Please specify

  • ajax-loader
  • A verifcation code has been sent to
    your mobile number

    Please enter the verification code below

This website uses cookie or similar technologies, to enhance your browsing experience and provide personalised recommendations. By continuing to use our website, you agree to our Privacy Policy and Cookie Policy. OK