Enforcement Directorate Raids Emaar MGF Premises over FDI Violation

December 4, 2009	(Be the first to rate this story!)  Loading ...
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The Enforcement Directorate on Thursday raided at least a dozen-odd premises belonging to the developer of the Commonwealth Games Village to collect evidence in an alleged foreign direct investment (FDI) violation case worth more than Rs 1,000 crore.

Sources in the ED said directors of Emaar MGF were summoned on several occasions after the agency had registered an inquiry against the firm in an alleged Foreign Exchange Management Act violation case where the company is believed to have purchased agricultural land in breach of FDI guidelines. As per FDI rules, a senior official said, money brought into the real estate sector cannot be used for buying agricultural land.

MGF, in collaboration with its Gulf partner Emaar, has allegedly used the FDI money worth hundreds of crores to buy cheap agricultural land in Haryana and Uttar Pradesh for real estate projects. An official statement from Emaar MGF said that there was a routine search operation by the ED at some of the company’s premises and it had cooperated fully with the investigation. The statement added that the investigation had absolutely no link to Madhu Koda’s arrest, ‘‘as inaccurately reported’’ in some sections of the media.

The investigation comes just when Emaar MGF — one of the largest players in the real estate sector — is preparing to launch an IPO. The previous effort — in 2008 — to tap the market was shelved. The enforcement agency had served multiple summons to Emaar-MGF officials but there was lack of cooperation, sources said.

News Published Under:   Real Estate Developers |

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