ED widens probe against foreign funds in Lalit Modi firm

ED widens probe against foreign funds in Lalit Modi firm

ED widens probe against foreign funds in Lalit Modi firm

The Enforcement Directorate (ED) has widened its probe into a foreign exchange violation case against former IPL boss Lalit Modi and others which involves alleged illegal routing of Rs 21 crore funds from a Mauritius- based company.

The agency, as part of its FEMA probe, has written to agencies like the Income Tax department, RBI and the Registrar of Companies (RoC) to obtain detailed information about the operations of the Rajasthan registered firm, said to be owned by Modi and his family members.

Sources said the agency may also get in touch with their counterparts in Mauritius to obtain details on the incorporation of a suspected firm there which allegedly sent funds to the Indian company.

At a later stage, they said, the agency may obtain a Letters Rogatory (judicial overseas request) from a court to get the records.

The case pertains to the routing of the amount a few years ago into this firm in alleged contravention of the Foreign Exchange Management Act (FEMA).

The sources said the present and past executives of the said firm would soon be called for questioning and even Modi could be served summons at a later stage for recording of his statement.

The ED had begun investigations into this case in October last year after it detected some foreign investment coming into this group which had Modi's relatives at the helm.

But in 2007, the sources said, the former cricket czar took over the directorship of the company along with his wife.

The agency has already recorded the statements of few executives of the said firm.  
The sources indicated it is unlikely that the ED could file a criminal case of money laundering in this deal as there is no schedule offence committed under IPC, a basic requirement for registering an FIR under the Prevention of Money Laundering Act (PMLA).
They said the agency's probe is focused to check if RBI guidelines or the provisions of the FEMA were violated in this transaction.

The authorities in the central probe agency are already going through the record sheets and bank documents of the firm and the one located in Mauritius in order to take forward the probe.

The ED, the sources said, had told the Delhi High Court early this year that they were probing the case under FEMA and not under the criminal charges of the anti-money laundering Act.

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