ED Seizes 9 Properties Of Venkateshwara Hatcheries Worth 65 Crore

The Directorate of Enforcement (ED) has seized nine immovable properties located in Maharashtra and Karnataka and valued at Rs 65.53 crore, of Venkateshwara Hatcheries Pvt Ltd (VHPL), better known as Venky's, under the provisions of the Foreign Exchange Management Act (FEMA), 1999.

The ED initiated an investigation into "illegal remittances" made by the company since 2011 till date to its wholly-owned subsidiary named Venky's Overseas Limited (VOL), UK. VHPL had declared the business of VOL to the RBI as Agriculture and Mining (rearing of ducks, hens and so on), and remitted huge funds to it in the guise of equity infusion. However, no such business activity was ever initiated by VOL even 11 years after its incorporation, the ED investigation found.

The investigation also revealed that VHPL had made remittances to the tune of GBP 73,96,069 (Rs 65.53 crore) to VOL since its incorporation till date. Immediately after its incorporation, VOL had purchased an immoveable property named Alexander House having an area of 90 acres in the United Kingdom using the funds remitted by VHPL, ostensibly to provide conveniences to the Directors and employees of VHPL. Further, all the funds remitted by VHPL to VOL subsequently were utilised for repayment of a loan obtained by VOL from Barclays Bank, UK, taken for acquisition of the said immoveable property.

Investigation established that VHPL had no intention of conducting any bona fide business through VOL, and that the latter was created as a front to purchase an immoveable property in the UK for the ultimate enjoyment by the directors, employees and family members of VHPL. Therefore, properties of an the equivalent value of VHPL in India have been seized under the provisions of Section 37A of FEMA.