Old overseas investment deals could come under ED fire

economictimes.indiatimes.com:

Since 2015 the law allows the Enforcement Directorate (ED) to seize equivalent assets in India for illegally holding assets abroad.

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However, this particular provision in the law, though broadly worded, was till now used for foreign exchange violations involving black money and irregular transactions like hawala. But, not anymore.

In two recent cases, the ED has seized the office space and immovable properties of companies which had used regular banking channels to transfer funds abroad under the overseas direct investment (ODI) route. While the companies under question remitted tax paid money and did not use hawala operators, they nonetheless faced harsh actions for using the ODI window to buy properties for personal use and hold funds abroad in an outfit that apparently had no bona fide business activity.

The consequences of ED’s actions are beginning to sink in among several business houses which have in the past used the ODI route to overcome restrictions in individual overseas investments or to take funds out of companies. They now fear that some of their assets in India could remain frozen with ED for these earlier transgressions which rarely drew the glare of the authorities before.


“We believe the Directorate is scrutinising almost every overseas high-value direct investment under ODI regulations as well as under the Liberalised Remittance Scheme (LRS). Indian parties and individuals are being told