ED seeks Indian investments details by DE Shaw Group | delhi | Hindustan Times
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ED seeks Indian investments details by DE Shaw Group

Probing alleged irregularities in funds invested by the DE Shaw Group in India, the Enforcement Directorate has sought details about all the investments made or proposed by the US-based private equity major so far in the country.

delhi Updated: Sep 04, 2011 15:56 IST

Probing alleged irregularities in funds invested by the DE Shaw Group in India, the Enforcement Directorate has sought details about all the investments made or proposed by the US-based private equity major so far in the country.

The ED has asked the FIPB, the government body that clears FDI (Foreign Direct Investment) into the country, to provide details about all the Indian entities that have received funds from the DE Shaw Group, sources said.

The DE Shaw Group manages over $20 billion of investment capital globally and has been present in India since 1996.

Queries sent to DE Shaw remained unanswered, but sources said the ED has sought details from the FIPB unit of the finance ministry as part of its probe into complaints of dubious funds allegedly invested in India by the US firm.

The Directorate, which possesses investigation and adjudication powers under the Foreign Exchange Management Act (FEMA), has also sought details of those Indian entities that have withdrawn their applications for investment by DE Shaw after queries were raised or the proposals were rejected by the FIPB.

Sources said the FIPB has been requested to furnish details like the names and addresses of such companies, along with copies of their applications, queries raised by FIPB, replies submitted by the investors and the final approvals for such deals with the DE Shaw Group, along with the terms and conditions therein.

Recently, the Reserve Bank of India (RBI) asked the government to consider a probe by the ED into alleged violations of foreign exchange regulations by global private equity major DE Shaw in a Rs 117 crore deal.

The matter relates to the purchase of an 18% stake by DE Shaw in Amar Ujala in 2007, but the Indian print media company later accused the US firm of indulging in fraudulent practices in this deal.

Hearing a petition filed by Amar Ujala, the Delhi High Court had issued notices to DE Shaw in this regard.

The court had also asked the RBI, the FIPB and the Ministry of Corporate Affairs to explain their stand on the DE Shaw-Amar Ujala deal.

After looking into the complaints of alleged violation of foreign investment norms in the deal, the RBI wrote to the Finance Ministry recommending that the matter should be referred to the ED.

The FIPB had also sought clarifications from DE Shaw on whether the deal was in conformity with all the terms and conditions specified in its approval.

Both Amar Ujala and DE Shaw have filed petitions against each other in the Delhi High Court.

DE Shaw, in its reply to the FIPB and in its petition to the court, claimed that the deal was in conformity with the regulations.