Did City Limouzines chairman Sayyed Masood swindle Rs 300 crore of investor wealth into his personal funds?
The Enforcement Directorate (ED) is investigating details of diamond exports made by Masood in 2008-2009 to ascertain if he is guilty of a financial fraud.
The ED has registered two cases against Masood under the Foreign Exchange Management Act (FEMA) and Prevention of Money Laundering Act (PMLA).
While investigation under FEMA deals with diamond exports, a probe under the PMLA will consider Masood’s investment into properties using investor’s funds.
It will also investigate if Masood transferred some of the funds into his personal accounts.
ED investigation into diamond exports has revealed that Masood took an advance remittance of Rs 300 crore by showing diamond deals with a Dubai based importer. The department learnt that the exports were only on paper to show that the amount was earned through business.
An ED official said Masood showed procurement of diamonds in Mumbai for export from more than 15 traders. “When we questioned these traders, we realised that they had only given the bills to him on commission and there was no actual delivery of diamonds,” the official said.
Investigating how Masood’s records show diamond exports, the ED will also probe credentials of the Dubai importer. Officials believe that the amount could be part of the money Masood allegedly swindled from thousands of investors across the country.
Masood was arrested by the Economic Offences Wing of the Mumbai police from outskirts of Delhi on February 4. The ED had last week provisionally attached Rs 64 crore worth demand drafts belonging to Masood’s company.
The department has provisionally attached the demand drafts for 150 days and sent details to adjudicating authorities in Delhi to confirm the same (attachment).
During this period (150 days) Masood has the opportunity to contest the provisional attachment.
The official said that they are also getting details of Masood’s properties to attach them. “There are many properties which are in the names of persons known to Masood,” the official said.
He added that the department would see if these properties were procured by money made through swindling the investors. “Once this is established we would attach the properties too,” the official said.