The Enforcement Directorate (ED) has filed its first charges under the Foreign Exchange Management Act (Fema) in a case related to the Commonwealth Games (CWG) scam.
Investigators from ED’s Delhi zone have filed a complaint (equivalent of a chargesheet) under Fema for contravention of R185 crore in awarding of the overlays contract to Pico Event Marketing (India) Private Limited (PEMI).
The adjudicating officer, after going through the complaint, will issue show cause notices to the company and its directors. The adjudicating officer can levy a penalty on the accused three times of the contravened amount under the law.
The Organising Committee (OC) of the CWG had awarded contracts for around R600 crore for the supply of overlays (items such as generator sets and furniture). One such contract was given to a consortium (Pico-Deepali) of Singapore-based Pico and its Indian partner Deepali Designs and Exhibits, a firm of BJP leader Sudhanshu Mittal’s nephew Vinay Mittal.
But after the contract was awarded, Pico showed the door to its Indian partner by signing an addendum to the memorandum of understanding. The termination of partnership has proved beneficial for Mittal as ED investigators did not find any evidence against him. Investigators have found that Pico had incorporated a company in India (PEMI) just when the contract for the overlays was to be awarded.
Investigators believe, PEMI was required to take permission from the RBI for the business of services since it had been working as de-facto branch office of the principal company in Singapore. But the required approval was not taken.