The Enforcement Directorate (ED) has summoned builder Niranjan Hiranandani and his son Darshan Hiranandani to appear before ED officials on Monday 26th February for questioning in connection with an alleged foreign exchange violation case.
Niranjan and Darshan Hiranandani
Niranjan Hiranandani is an Indian resident, however his son Darshan maintains his status as a non-resident Indian, as he has been residing in Dubai for the past 14 years and operates his business from there. The summons were sent via email due to their absence from India. The ED also requested several documents linked to the foreign direct investment (FDI) case involving the Hiranandani Group.
ED raids and subsequent discoveries
According to sources, during the search, the ED recovered several documents in connection with the company's transactions, but several documents linked to the Panvel and Chennai FDI-related Foreign Exchange Management Act (FEMA) cases were missing. The Hiranandani Group, in a statement, said that since the case pertains to a 15-year-old matter, it took time to dig out old records to share with the investing authority.
“In the FEMA violation case, the ED found that Hiranandani Group entities allegedly received Rs400 crore through the FDI channel for housing projects in Panvel and Chennai. However, the utilisation of these funds in these projects was allegedly not as per the prescribed RBI guidelines. Sources close to the investigation indicate that the ED is keen to probe potential fund diversions and regulatory non-compliances.”
Additionally, it has come to light that one of the group entities that received FDI failed to repay loans secured from a consortium of banks, resulting in its classification as a non-performing asset (NPA).
An intriguing turn of events unfolded when an incomplete project, owing to the financial defaults, was taken over by another Hiranandani group entity through Debt Recovery Tribunal (DRT) proceedings. The ED is now scrutinising these takeover proceedings for any signs of manipulation or irregularities.
According to sources, the Hiranandanis allegedly set up at least 25 companies and a trust in the British Virgin Islands between 2006 and 2008. The ED requires details of these companies, including their profiles, investments, and links to Indian business group transactions.
