Enforcement Directorate informed about Violation of FEMA by Companies involved in 2G Scam

The Enforcement Directorate informed the Supreme Court on 1 September 2011 that companies involved in the 2G spectrum scam had violated the Foreign Exchange Management Act (Fema) to the tune of Rs 10000 crore.

The directorate had detected Fema violations to the tune of Rs 9,929.80 crore and under rules, the agency can now slap a fine three times the violation. The enforcement directorate under the Fema procedures can thus  slap a penalty of nearly Rs 30000 crore, which was the quantum of loss to the exchequer estimated by the CBI due to alleged irregular allotment of the 2G spectrum in 2008 by the then telecom minister A Raja.

Properties worth Rs 223 crore had been attached, mainly relating to the Rs 200 crore paid allegedly by DB Group’s Shahid Balwa to DMK-controlled Kalaignar TV as a quid pro quo for spectrum to Swan Telecom.

Senior advocate K K Venugopal, appearing for ED, pleaded with a bench of Justice G S Singhvi and A K Ganguly for six more months to complete the probe into the violation of Fema. the agency was asked to complete the probe within three months.

The directorate is currently examining transactions involving around 350 accounts, of which nearly 200 were intimated by the Financial Intelligence Unit (FIU) which keeps track of suspicious movement of money in foreign accounts.