The Enforcement Directorate (ED) is investigating the Sahara group for alleged violation of the Foreign Exchange Management Act (Fema) for purchasing the Grosvenor hotel and another property in the UK.
According to sources, the Directorate has officially communicated to the Reserve Bank of India (RBI) in this regard for getting more information after investigators questioned officials of two banks — the ICICI and the Axis Bank.
Sources allege that these two banks were involved in transferring of funds to Mauritius in December last year.
The Sahara group has dismissed the charges. Sahara spokesperson Abhijit Sarakar told PTI that both the ICICI Bank and Axis Bank had done their complete due diligence while transferring the funds overseas, which were used to invest in the hospitality sector overseas.
“At every stage, there has not been a single incident of violation of any regulatory or legal requirement. The flow of funds is very much in accordance of the objects of the respective companies and we have been very open right from the beginning about the entire transaction and there is nothing to hide from the authorities concerned,” the spokesperson added.
The ED suspects “contravention” of the Foreign Exchange Management Act (FEMA) in this deal as the funds were allegedly routed through Mauritius — a tax haven. Sources also said the ED would now issue notices to the Sahara group under FEMA laws.