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Enforcement Department (ED) is investigating a multi-crore school recruitment case in West Bengal. (File photo: News18)
A GDR is defined as a negotiable financial instrument issued by a depository bank and that enables a company to reach investors in capital markets abroad.
The Enforcement Department on Friday said it had attached assets worth more than Rs 59 crore to a London-based Person of Indian Origin (PIO) and some other entities as part of a money laundering investigation linked to an alleged Global Depositary Receipt (GDR) scam.
GDR is defined as a negotiable financial instrument issued by a depository bank and which enables the company to reach investors in capital markets abroad.
The properties are owned by London-based Arun Panchariya, Sanjay Aggarwal and India Focus Cardinal Fund. ED said in a statement that assets totaling Rs 59.37 crore were confiscated in an investigation related to Hyderabad-based Pharmax India Ltd.
Panchariya and associated entities such as London-based Pan Asia Advisors Limited (now Global Finance and Capital Limited), India Focus Cardinal Fund and Vintage FZE (“Vintage” – now Alta Vista International FZE) along with its partners such as Aggarwal, Jalaj Batra and others designed and implemented a ‘fraudulent’ GDR scheme in parallel with Mortivas India Limited, promoters and Indian investors claimed.
As per the rules, when a GDR of an Indian company is subscribed abroad, the proceeds are delegated to India unless deposited abroad to meet future foreign exchange requirements.
However, in the case of Farmax India Limited, the proceeds of GDR of US$71.91 million (equivalent to Rs. 318 crores at the prevailing exchange rate at the time of issuance of GDRs in June-August 2010) were not returned to India, even in the absence of good future foreign exchange requirements, said the CEO.
It said that the proceeds of GDR amounting to USD 56.57 million, which was received in the bank account of Farmax India Limited in EURAM Bank, Austria, was pledged as security against the loan taken by the joint GDR Vintage FZE.
The money laundering case stems from the Telangana Police FIR filed against the accused earlier.
(This story was not edited by the News18 staff and was published from a syndicated news agency feed – PTI)
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