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ED seizes Rs 16 crore from a Hyderabad-based company for violation of FEMA

The Hawk
November23/ 2022

New Delhi (The Hawk): In accordance with the terms of the Foreign Exchange Management Act, the Enforcement Directorate (ED) announced on Wednesday that it had seized Rs 16 crore from Hyderabad-based Alphageo (India) Limited in the form of a fixed deposit (FEMA).

The ED opened an investigation into Alphageo India Limited based on information that the company had moved and parked certain funds in the United Arab Emirates in violation of the FEMA's rules.

Investigation results showed that Alphageo works with numerous oil exploration and production businesses in India and internationally, offering seismic survey services. The business has been purchasing several seismic data collecting tools from numerous providers with offices in France, Singapore, the Netherlands, and other countries.

The ED learned that Alphageo had purchased seismic data acquisition equipment directly from a number of suppliers, but that Rajiv Saxena, a chartered accountant based in Dubai and a hawala operator for these imports, had maintained and controlled an entity called Matrix Group DMCC through which the payment for that equipment had been made.

The ED further discovered that Alphageo had violated the FEMA Act by over-invoicing import invoices for these imports and parking money into Matrix Group DMCC's account for the personal advantage of Dinesh Alla, Chairman and Managing Director of Alphageo (India) Limited.

Investigations showed that USD 25,34,628 was retained outside of India, which was a blatant infraction of FEMA section 4. Therefore, under Section 37A of FEMA, Alphageo's equivalent amount of the foreign funds it had stored in the United Arab Emirates, or Rs 16 crore, has been confiscated in India, according to the ED.

The problem is being looked into further.

(Inputs from Agencies)