CHENNAI: The Enforcement Directorate (ED) has accused Sree Gokulam Chits and Finance Co Pvt Ltd of collecting Rs 592.50 crore in cash and cheques from individuals residing outside India, in violation of Reserve Bank of India (RBI) regulations.
The agency also stated that it seized Rs 1.50 crore in cash after conducting two days of searches at properties linked to the chit fund firm in Chennai and Kozhikode.
“Collecting cash from persons resident outside India is a violation of the regulations framed by the Reserve Bank of India (RBI). This led to the violation of Regulation 4(b) of the Foreign Exchange Management (Permissible Capital Account Transactions) Regulations,” the ED said in a statement on Saturday.
Of the Rs 592.50 crore, Rs 371.80 crore was allegedly collected in cash by the firm as subscription fees for its chit fund schemes. Additionally, substantial amounts were paid in cash to persons residing outside India, violating Section 3(b) of the Foreign Exchange Management Act (FEMA), 1999, the ED said.
The investigation was initiated based on specific intelligence that Sree Gokulam Chits and Finance Co Pvt Ltd was collecting subscriptions to chit funds from non-resident individuals without obtaining due permission from the competent authority.
The ED conducted searches at two locations in Chennai and one in Kozhikode. Around 20 officers from the ED’s Cochin zone were involved in the operation, which continued until Saturday noon.
At the conclusion of the searches, the agency confirmed the seizure of Rs 1.5 crore in cash, though it did not disclose the exact location of the recovery.