Mumbai: As part of a major crackdown on money laundering and violations under the Foreign Exchange Management Act (FEMA), the Enforcement Directorate (ED) is conducting searches and investigating the role of over 50 individuals and companies, including K Sera Sera (KSS Ltd), the production and distribution company behind movie ‘Ab Tak Chhapan’ centred on a police encounter specialist.
The other companies under the ED scanner are Kolar Biotech, Asian Graneto, Crest Ventures, Zenith Infotech, Mystique Electronics, Sharepro Services and Nirmal Kotecha.
The agency is probing manipulation in the issuance of Global Depository Receipts (GDRs) for allegedly routing black money back to India. The recent crackdown has led to several corporate honchos being summoned for questioning by the ED.
K Sera Sera's group chairman summoned
K Sera Sera’s group chairman Satish Panchariya was summoned regarding the deposit of about $55 million in Austria-based European American Investment (EURAM) Bank, raised from GDR issued in 2007-09. The ED investigation found large-scale misuse of GDRs for suspected illicit funds stashed abroad to be brought back to India.
“K Sera Sera is being probed for inflating the size of business deals without making any profits reflecting on its balance sheet and to transfer illicit funds,” a senior probe official said.
SEBI had banned K Sera Sera earlier for 10 years
K Sera Sera was earlier banned by market regulator Securities and Exchange Board of India (SEBI) for 10 years and also fined Rs12 crore in 2021 for alleged market manipulation using GDR involving production firm promoters.
SEBI had also barred 19 other domestic and foreign firms from securities markets for alleged manipulation in the issuance of GDRs and warned several others, including foreign institutional investors.
Regulators had raised concerns about GDRs facilitating conversion of unaccounted money and returning back the same legally in India. Many Indian companies list their debt securities on international exchanges famously known as masala bonds.
