The Enforcement Directorate (ED) has taken decisive action under section 37A (1) of the FEMA, 1999 against the Estate of the late Anil Salgaocar. This measure pertains to the confiscation order executed against the shares belonging to the Salgaocar Estate, linked to overseas assets held by the late Anil Salgaocar beyond the borders of India.
The initiation of the ED inquiry is rooted in revelations emerging from the Panama Paper leaks and Pandora Paper leaks. These leaks have brought to light the assertion that Anil Vassudeva Salgaocar, a resident of Goa, was instrumental in setting up a series of British Virgin Islands (BVI) companies.
Upon conducting its meticulous investigation, the Enforcement Directorate unearthed significant information. Late Anil Salgaocar possessed iron ore mines situated in both Goa and Karnataka. The output from these mines was exclusively retailed or exported through his domestic group enterprises to Special Purpose Vehicles (SPVs) in BVI and Singapore.
Curiously, these SPVs were intentionally concealed from the scrutiny of the Indian authorities by operating as trade-oriented entities responsible for marketing Indian-produced iron ore to China, thus enabling the diversion of profits beyond the Indian shores.
The cumulative profits amassed by the five BVI companies connected to Late Anil Salgaocar amounted to a staggering USD 690,650,641 (approximately Rs. 5718 Crore) derived from trading in iron ore. These considerable gains remained undisclosed to the Indian regulatory authorities.
As a result of these findings, it has been established that Late Anil Salgaocar’s actions contravened the stipulations outlined in section 4 of the FEMA, 1999. This breach involved the unauthorized acquisition of foreign exchange and the possession of offshore assets, leading to a total contravention amounting to USD 69,06,50,641 (approximately Rs. 5718 Crore).
In alignment with these findings, the entirety of the shareholdings that Salgaocar bequeathed to his Estate across 33 diverse companies—ranging from fractional stakes of .1% to controlling interests of 99.9%—have been subjected to confiscation by the Enforcement Directorate.
These 33 companies possess a portfolio of 441 immovable assets, primarily in Goa, a handful in Mumbai as well as Karnataka.
The full press release can be found here
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