ED Slaps Rs100 Crore Penalty on Standard Chartered Bank for FEMA Violations
The enforcement directorate (ED) said on Friday that the Standard Chartered Bank has been fined Rs100 crore by its adjudicating authority under the Foreign Exchange Management Act, 1999 (FEMA).
 
The adjudicating authority has also fined Tamilnad Mercantile Bank (TMB) Rs 17 crore and its then chairman and director MGM. Maran Rs35 crore.
 
According to the ED, a probe under FEMA was taken up based on reference received from the Reserve Bank of India (RBI) to investigate advance remittances received by certain entities for purchase of the shares of Tuticorin headquartered TMB through the escrow mechanism maintained with Standard Chartered Bank, Mumbai.
 
Following the probe, the ED had issued a show-cause notice to TMB, its directors, Standard Chartered Bank and one of its officials for contravening FEMA.
 
In his adjudication order, the special director, ED, southern region, imposed a penalty of Rs11.33 crore on TMB for recording in its books the transfer of 46,862 shares of the bank in the names of seven foreign entities—RST Limited (wholly owned by Ravi S Trehan), Katra Holdings Limited (wholly owned by Ramesh Vangal), GHI I Limited (wholly owned by Rajat Gupta), Kamehameha (Mauritius) Limited, FI Investments (Mauritius) Limited, Cuna Group (Mauritius) Limited, and Swiss Re Investors (Mauritius) Limited.
 
The above seven entities were not approved by RBI for acquiring the shares of TMB.
 
A further penalty of Rs5.66 crore was imposed on TMB for its act of recording in its books the subsequent transfer of 27,289 shares out of the above 46,862 shares in the names of two foreign entities—Sub-Continental Equities Ltd, Mauritius, and Robert & Adris James Company Limited, Mauritius, without the permission of RBI.
 
Penalty has also been imposed on the directors of the board of TMB who approved the recording of the transfer of shares of the Bank.
 
The Standard Chartered Bank was held guilty of contravening FEMA for opening the Standard Chartered Bank Project Windmill (Sale Consideration) escrow account without RBI's prior permission and for allowing deposits of Rs113 crore and for having held 1,12,151 shares of TMB in the said escrow account.
 
The Standard Chartered Bank was levied a penalty of Rs34 crore for the above contraventions.
 
Another Rs 66 crore penalty was levied on the Standard Chartered Bank for providing collateral/guarantee taking into custody of TMB shares and original sale deeds of land in lieu of which Standard Chartered Bank, Mauritius, granted a loan of $55.40 million (equivalent to Rs221 crore) to three foreign entities—Katra Holdings Limited, Mauritius, RST Limited, Cayman Islands, and GHI I Limited, Cayman Islands, without any special permission from RBI.
 
According to the ED, a penalty of Rs35 crore was also imposed on Mr Maran, then chairman and director of TMB, for opening a bank account in Singapore and receiving foreign exchange to the tune of $68,50,000 (equivalent to Rs28.08 crore) in that account from a foreign entity.
 
The said payment is the consideration for facilitating and assigning the rights towards transfer of shares of TMB in favour of Katra Holdings Limited, consequent to a private agreement with that company. The penalty is also for failing to repatriate the said foreign exchange of $68,50,000 into India.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
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    Deepak Kochhar sent to ED custody for 11 days
    A special court in Mumbai on Tuesday sent businessman Deepak Kochhar to 11 days custody of the Enforcement Directorate (ED) which arrested him late on Monday in a money-laundering case.
     
    Kochhar, the husband of the high-profile former ICICI Bank CEO and MD Chanda Kochhar, is facing charges of money-laundering in the ICICI Bank-Videocon Group case.
     
    He was produced before a special Prevention of Money Laundering Act court this afternoon and sent to the ED custody till September 19.
     
    The action came nearly a year after the Central Bureau of Investigation launched a probe against Videocon Group Director Venugopal Dhoot, his companies Videocon International Electronics Ltd. and Videocon Industries Ltd, and the Kochhars.
     
    Following the CBI complaint, the ED launched its own probe into the money-laundering angle, and earlier this year, provisionally attached assets valued at around Rs 78 crore including a flat in Mumbai, land, and plant and machinery of a wind power project in Maharashtra and Tamil Nadu, which were "owned/controlled" by the Kochhars.
     
    The probe revealed that bank loans were refinanced and new loans aggregating to Rs 1,730 crore were sanctioned to Videocon and its group companies, and these loans later became non-performing assets (NPA) for ICICI Bank on June 30, 2017.
     
    Besides, an amount of Rs 64 crore from the Rs 300 crore loans cleared by a ICICI Bank committee headed by Chanda Kochhar to VIEL was transferred to NuPower Renewables Pvt. Ltd (NRPL), a company owned by her husband, by VIL in September 8, 2009, a day after it was disbursed by the bank.
     
    Kochhar's company generated a revenue of Rs 10.65 crore from these funds and the ED said the proceeds of crime totalling to over Rs 74 crore was transferred to his NRPL.
     
    Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
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    SBI notice to Bhushan Power & Steel ex-promoter Sanjay Singal to recover over Rs12,000 cr
    The State Bank of India (SBI) has invoked the personal guarantees of Sanjay Singal, former promoter of Bhushan Power & Steel Ltd (BPSL), and has sent him a demand notice for recovery of Rs 12,275.91 crore.
     
    The development comes at a time when the resolution process of the bankrupt company hangs in fire and awaits a Supreme Court verdict.
     
    The demand notice, seen by IANS, says that no security is provided by the guarantor "so the entire amount as on August 31, amounting to Rs 12,275.91 crore payable by the guarantor, is unsecured as regards the guarantor".
     
    The development comes days after the Finance Ministry has asked public sector banks (PSBs) to put in place a mechanism for monitoring cases which may require initiation of insolvency proceedings against the personal guarantors to corporate debtors.
     
    The norms for initiation of the insolvency resolution process for personal guarantors to corporate debtors before the National Company Law Tribunal (NCLT) came into effect in December last year.
     
    JSW Steel has won the bid to acquire the debt-laden company for Rs 19,700 crore after the National Company Law Appellate Tribunal (NCLAT) approved its resolution plan.
     
    The much-prolonged resolution of Bhushan Power and Steel Ltd is, however, stuck in its last leg over attachment of BPSL's assets by the Enforcement Directorate in a money-laundering case.
     
    Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
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    COMMENTS

    shetyerb

    2 months ago

    Right approach for the Businessmen like him. The personal guarantees must be invoked in all such cases where the businessmen create hurdles by going to the Court. Unfortunately the Courts, most of the time do not understand the game or part of the game.

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