Granite Business Raids: ED Finds Multiple Benami Bank Accounts

The Directorate of Enforcement (ED), which conducted searches at the offices and residential premises of granite companies on November 9 and 10, reportedly found many irregularities in their business operations.

It has found multiple benami bank accounts with different names, and is now trying to unearth evidence pertaining to FEMA violations.

The ED conducted raids on Swetha Granites, Swetha Agencies, Sri Venkateshwara Granites, PSR Granites, Arvind Granites, Giriraj Shipping Agencies and their related entities in Karimnagar and Hyderabad.

During the search action, the ED search teams found and seized unaccounted cash of Rs 1.08 crore, allegedly received in hawala against exports, and also seized voluminous granite dispatch data of 10 years from the quarries.

The raided entities are exporting rough granite blocks to China, Hong Kong SAR, China and other countries. During the course of the enquiries, it was found that the exported quantity was more than the quantity on which royalty was paid, and that there was under-reporting of quantity while exporting.

In many instances, the export proceeds were also not realized in the declared bank accounts, indicating that the export proceeds were received through non-banking channels.

The ED search teams also found multiple benami bank accounts in the names of employees of granite exporters, in which cash received against the illegal granite exports was being deposited.

The searches also led to detection of money being routed back from Chinese entities into the Indian entities in the form of hand loans without documents. These Chinese entities are owned by Li Wenhuo, whose name appeared in the Panama leaks.

The ED investigation into the "illegal" granite mining and "FEMA violations" has been initiated on the basis of the report of the Vigilance & Enforcement department of the State government wherein large-scale evasion of Seigniorage fee on granite blocks transported from the quarry lease areas of the Karimnagar district to the sea ports by the railways was detected, and demands for the evaded royalty were raised but not paid by the exporters.

Further investigation is under progress, a release said.