The Enforcement Directorate (ED) has conducted searches at 16 locations in Kolkata, Delhi and Bengaluru under the Foreign Exchange Management Act (FEMA), 1999, in a case related to the takeover of McNally Bharat Engineering Company Limited (MBECL).
The agency is investigating possible FEMA violations involving the source and movement of funds used for the acquisition. According to the ED, the searches are being conducted at the premises of people and entities associated with the acquisition of MBECL.
These include premises belonging to Sanjay Pasari, Rajeev Pasari, Ravi Todi and Sudhir Satnaliwala and premises of BTL EPC Ltd, Mandal Vyapar Pvt Ltd, Trolex (India) Pvt Ltd, Semphil Enterprises Ltd and Mahabaleshwar Merchants Pvt Ltd.
The investigating agency is also looking into the actual source of the money used to gain control of MBECL and how it was transacted through various channels.
The ED is also investigating transactions and financial activities involving possible foreign exchange law violations. According to the ED, another aspect of the investigation is related to Section 29A of the Insolvency and Bankruptcy Code (IBC), 2016.
The agency is probing whether the company’s insolvency resolution process was used to indirectly enable people to regain control of the company, who would have been ineligible to acquire control of the company under Section 29A. ED said that search and investigation is underway in the case.