ED slaps FEMA notice on Videocon

MUMBAI: A special director of the Enforcement Directorate (ED), Mumbai issued a show-cause notice to six Videocon Group companies and its three top executives on Thursday for violating the Foreign Exchange Management Act (FEMA) regulations while raising Rs 660 crore abroad.
When contacted, Videocon Group chairman V N Dhoot told TOI, "I have not received any notice so far. If any such notice is issued, it may be for non submission of quarterly returns and, hence, will not have any pecuniary impact upon the company.FEMA violation is not a criminal offence and so only a cautionary notice may be there without any monetary penalty."
An ED officer said the Group firms had formed a company overseas. The entity raised Rs 660 crore loan from overseas banks for the functioning of the companies, the officer said, adding that part of the money was transferred to the companies.
The six companies and the three executives had furnished collateral security while taking the loan on behalf of the companies and in individual capacity. "They had violated FEMA (guarantee) regulation during the process," said the officer.
The ED also tweeted that it "issues show cause notice to Videocon Group Companies for FEMA contravention of Rs 660 cr".
The ED notice has asked the group companies, along with the top executives and another individual, to explain their stand before ED officials personally or through an appointed representative (CA or lawyer).