Central Agency Raids Jindal Group Firms Over Suspected FEMA Violations

The Enforcement Directorate has carried out search operations under the Foreign Exchange Management Act at 13 locations linked to the BC Jindal Group and its associates. The searches were conducted on September 18 and 19 across premises in Delhi-NCR and Hyderabad.

According to the ED, the raids were initiated over suspected FEMA (Foreign Exchange Management Act) violations by group entities, particularly Jindal India Thermal Power Ltd or JITPL, Jindal India Powertech Ltd or JIPL, and Jindal Poly Films Ltd or JPFL. The agency is probing alleged irregularities in overseas investments, round-tripping of funds, and diversion of public investors' money.

Investigators allege that firms owned by Shyam Sundar Jindal, his wife Shubhdra Jindal, and son Bhavesh Jindal remitted Rs 505.14 crore to their Dubai-based entity Topaz Enterprise DMCC. The remittance was allegedly used to acquire Garnet Enterprise DMCC, another overseas entity, under the guise of Overseas Direct Investment.

The probe has revealed that between 2013-14 and 2016-17, JPFL invested Rs 703.79 crore into JIPL, which was in turn invested in JITPL's Odisha-based coal power project. However, instead of recovering the investment, JPFL wrote off the amount in FY 2018-19 and sold it at a major loss to promoters and related companies - an act the ED suspects was a deliberate siphoning of investor money.

In May 2024, JIPL received Rs 853.72 crore from JITPL by redeeming preferential shares. Instead of repaying JPFL, Rs 505.14 crore was allegedly diverted to Topaz Enterprise DMCC, controlled by Shyam Sundar Jindal, for acquiring Garnet Enterprise DMCC.

Recovered documents suggest that valuation reports were manipulated to justify inflated remittances abroad. The ED suspects the group routed funds overseas through sham transactions and parked them in multiple entities across the Netherlands, USA, Belgium, Italy, Luxembourg, Singapore, China, UAE, and Germany, all beneficially owned by the Jindal family.

Notably, Shyam Sundar Jindal was abroad in Hong Kong during the search operations and has yet to join the investigation.

The ED confirmed that incriminating documents relating to overseas acquisitions and financial control were seized, and further investigation is underway.