ED attaches ₹10-crore assets in FEMA probe

The Enforcement Directorate has attached assets worth ?10 crore in relation to alleged FEMA violations against VIPS Group of Companies and Global Affiliate Business, who are allegedly involved in illegal trades, including crypto exchange. The group allegedly siphoned off proceeds from the illegal trades abroad via hawala channels and various shell companies. Collections worth ?125 crore were procured allegedly in the garb of investment for earning interest or commission income.

Mumbai: The Enforcement Directorate (ED) has provisionally attached assets worth ₹10 crore related to alleged FEMA (Foreign Exchange Management Act) violations against a group of companies that are allegedly involved in illegal trades, including crypto exchange, for which it collected ₹125 crore from various investors.

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The ED investigation found that the group of companies, VIPS Group of Companies and Global Affiliate Business, whose owner stays in Dubai, had allegedly siphoned off the proceeds from the illegal trades abroad via hawala channels as well as to various shell companies/firms. The probe revealed that the firms allegedly have several investors from Mumbai.

The agency attached bank balances kept in the accounts of several banks by firms/entities, to the tune of ₹10 crore, an ED source said. This is the second time the agency has attached the assets of the companies since May. On May 25, the ED provisionally attached cash and bank balances in connection with the probe against VIPS Group of Companies and Global Affiliate Business allegedly managed and controlled by the Dubai-based Vinod Khute and his relatives.

“The ED had initiated its investigation under FEMA, 1999, against Khute and others, who is presently residing in Dubai and is the mastermind of various illegal trade, crypto exchange, wallet services being operated through VIPS Group of companies,” an ED source said.

ED’s investigation revealed that collections worth ₹125 crore were procured allegedly in the garb of investment for earning interest or commission income.

ED’s investigation found that Global Affiliate Business was allegedly being operated through an application which is available on Google Play Store as well as Apple Store, the ED source said. The probe revealed that Global Affiliate Business has allegedly been running an illegal/unauthorised multi-level marketing scheme, wherein if a person opts for the scheme as a member and refers other consumers/clients on the application/website, a commission on his investment/expense on the application is credited to his account/wallet. In this manner, funds of ₹125 crore were collected from investors.

Global Affiliate Business was also found to be allegedly marketing the business of another firm, which is engaged in brokerage under which various clients trade in forex, crypto and stocks among others. “The brokerage firm, in consultation with the directors of VIPS group of companies, also conducts various weekly training programmes for the clients of Global Affiliate Business for investment in VIPSWALLET, VIPSFINSTOCK, for sale and purchase of crypto, stocks, and how to lure other consumers/clients into illegal and unauthorised multi-level marketing schemes,” the ED source said.