Mumbai: The Enforcement Directorate (ED) in Mumbai conducted search operations on Thursday at five locations in Mumbai under the provisions of the Foreign Exchange Management Act (FEMA).
The raids targeted full-fledged money changers (FFMCs) suspected of illegally trading and distributing foreign currency. The companies involved in this investigation include M/s Kuntilaa Forex Pvt Ltd (KFPL), M/s Shagun Enterprises, M/s Capital India Finance Ltd, and M/s MDB Tours and Forex Pvt Ltd.
During the searches, the ED seized various incriminating documents, electronic devices, foreign currency from multiple countries equivalent to Rs 4.6 crore, and Indian currency, the agency said on Friday.
According to an official statement from the financial probe agency, the probe originated from unusual financial patterns detected during the financial year 2022-23 within the forex operations of KFPL, a licensed FFMC, whose licence was revoked by the Reserve Bank of India (RBI) in October 2023.
The investigation revealed that bank accounts belonging to M/s KFPL, M/s MDB Tours and Forex Pvt Ltd, and others were used to deposit cash and receive funds from various sources. These funds were used by FFMCs to purchase foreign currency in bulk from M/s Capital India Finance Ltd, an AD-Category-II licensee. The purchased foreign currency was subsequently sold through unauthorised or illegal channels.
“The investigation further uncovered that cash deposits exceeding Rs370 crore were made in the bank accounts of M/s KFPL over a short span of 14 months during 2022-23. The ED also found that M/s Capital India Finance Ltd was receiving hundreds of crores within a short period from various FFMCs with no prior history or expertise in handling such large transaction volumes. Several of these FFMCs had their licences revoked by the RBI due to non-compliance with regulatory guidelines and suspicious transactions,” the statement said.