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ED charged HDFC Bank & Bank of Baroda for “unauthorized” repatriation of Rs 187 crore

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The ED complaint claimed two shell companies of Amrapali promoters were used to move money out of India by hugely inflating share prices.

In the Rs 800 crore Foreign Exchange Management Act violation case against Amrapali group and J P Morgan, the Enforcement Directorate has made HDFC Bank and Bank of Baroda parties in the “unauthorised” repatriation of over Rs 187 crore, made without taking RBI’s approval.

HDFC Bank is likely to face a penalty over “unauthorised remittance” of Rs 140 crore to J P Morgan while Bank of Baroda is being held liable for repatriation of Rs 47.3 crore which the ED claims are illegal transactions in violation of FEMA rules and lacking RBI approval. The ED complaint claimed two shell companies of Amrapali promoters were used to move money out of India by hugely inflating share prices.

The ED issued summons to the banks seeking clarification on the “unauthorised remittances” but they failed to respond, sources said. When TOI sought comments from the two banks, a spokesperson for HDFC Bank said the bank was not aware of any such summons. No response was received from Bank of Baroda.

The investigating agency, likely to take Amrapali promoters in custody this week for questioning, named the two banks in its FEMA complaint filed on January 8. The FEMA complaint is equivalent to a chargesheet and further proceedings before the special director of ED, a quasi-judicial authority, will determine the amount of penalty that may be levied on the two banks.

The ED has also registered a separate case against Amrapali and J P Morgan under Prevention of Money Laundering Act (PMLA) for attachment of properties. The agency has also questioned former nominee directors of J P Morgan, who were on the board of Amrapali Zodiac and Amrapali Silicon City, under PMLA. Amrapali has been accused of making dummy directors in “collusion” with J P Morgan to siphon off homebuyers’ money.

On Monday, the ED informed Supreme Court that a PMLA court in Lucknow had issued three production warrants against directors of Amrapali group to join investigation. The agency urged the apex court to issue directives for custodial interrogation of the accused Amrapali directors.

Source: TNN

(Note: The story has been published without modifications to the text. Only the headline and intro have been changed.)

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