ED seizes nine assets of Pune-based poultry major in FEMA probe

The Enforcement Directorate (ED) has seized assets worth ₹65.53 crore of Venkateshwara Hatcheries Pvt Ltd (VHPL) as part of its FEMA investigation. VHPL allegedly sent remittances abroad to its subsidiary, Venky’s Overseas Limited (VOL), UK, which used the funds to buy property in the UK instead of using it for specified purposes. The ED found that VOL had no intention of conducting business and was created as a front to purchase the property for the directors and employees of VHPL.

MUMBAI: The Enforcement Directorate (ED) has seized assets, in Karnataka and Maharashtra, worth ₹65.53 crore of Pune-based Venkateshwara Hatcheries Pvt Ltd (VHPL) as part of its FEMA (Foreign Exchange Management Act) investigation.

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The ED’s investigation revealed that the firm, which is also into food processing, had allegedly sent remittances abroad worth ₹65.53 crore, as equity infusion to its wholly owned subsidiary, Venky’s Overseas Limited (VOL), UK.

The VOL used the funds to buy an immovable property in the United Kingdom instead of using the money towards specified purposes.

The ED’s investigation revealed that VHPL had declared the business of VOL to the Reserve Bank of India as agriculture and mining, including rearing of ducks, hens, among others. No such business activity, however, was ever undertaken by VOL even after the lapse of over 11 years since its incorporation, said the ED sources.

Sources said the ED has initiated its investigation in connection with the alleged illegal remittances of Great Britain Pound 73,96,069, equivalent to ₹65.53 crore, made by the company since 2011 to VOL.

Immediately after its incorporation, VOL allegedly purchased Alexander House, an immovable property in the UK that has a total area of 90 acres, through the funds remitted by VHPL with a view to provide convenience to the latter’s directors and employees. According to the ED sources, the remittances violated the provisions of FEMA, 1999.

“All the funds remitted by VHPL to VOL were subsequently utilised for repayment of the loan obtained by VOL from the Barclays Bank, UK, which was taken for the acquisition of the Alexander House,” a source said.

“The ED’s investigation established that VHPL had no intention to conduct bona-fide business through its subsidiary, VOL, and it was created as a front to purchase an immovable property in the UK for the ultimate enjoyment by the directors, employees and family members of VHPL,” the source said.

The ED therefore seized the equivalent value of properties held by the company in India, which included the nine assets located in Maharashtra and Karnataka with an estimated value of ₹65.53 crore, under the provisions of FEMA, the source said.

VHPL is part of the VH Group that is an Indian conglomerate primarily comprising companies related to the poultry industry, including processed food, vaccines, human and animal health care products.