Vidushi Nautiyal, Pune
The Enforcement Directorate (ED) on Thursday launched searches at the real estate major Hiranandani Group’s properties in and around Mumbai concerning alleged foreign exchange violations. This came after the income tax department in March 2022 conducted multi-city searches of the real estate group’s properties due to concerns of alleged tax evasion.
According to an official, the agency is investigating different places in Mumbai per the Foreign Exchange Management Act (FEMA) concerning Niranjan Hiranandani, Darshan Hiranandani, and their group companies. Five official and residential locations connected to the Hiranandani Group are being raided, including the residence of Niranjan Hiranandani and the corporate and registered offices of the group. As per the case, Niranjan Hiranandani and his family were beneficiaries of an offshore trust that racked up assets of over USD 60 million. The organization was also mentioned in The Indian Express’s Pandora Papers as well.
The Pandora Papers refers to a trove of 11.9 million classified papers obtained from fourteen offshore service providers. These documents reveal the ownership of 29,000 offshore companies that the ultra-wealthy use to control their international money transfers.
The International Consortium of Investigative Journalists (ICIJ) acquired the data and sent it to 150 media partners. The Indian Express looked into the names of Indian people on the list. According to an official, Hiranandani established a Trust and at least 25 companies in the British Virgin Islands between 2006 and 2008. He further said that they also had more than Rs 400 crore in foreign direct investments (FDIs) received from group companies that were involved in real estate projects in Tamil Nadu and Maharashtra.
The official stated that the quantity was not used under the government’s established guidelines. After receiving FDI, one of the group firms was labeled non-performing asset (NPA) because it failed to repay loans it had taken out from a group of banks. Another Hiranandani group company then assumed control of the unfinished project in DRT proceedings.
The income tax (I-T) department searched about 25 Hiranandani Group locations in three cities—Mumbai, Bangalore, and Chennai—in March 2022 over suspected tax evasion.
“We have extended full cooperation to the department by facilitating all the relevant information and clarification sought by them,” stated an official spokesperson of the group. They further continued that it took some time to find old records because the inquiry concerns a development that happened fifteen years ago. “The Group understands that ED is satisfied that there were no FEMA violations. The group will remain cooperative and law-abiding.”