The Enforcement Directorate (ED) has found that some granite companies in Telangana, including those associated with a state minister, have links to Chinese entities owned by Li Wenhuo, whose name surfaced in the Panama Paper leaks.
The ED, which conducted searches at offices and residential premises of six granite companies in Karimnagar and Hyderabad to investigate and unearth evidences pertaining to FEMA violations, said the search action led to detection of money being routed back from Chinese entities into Indian entities in the form of hand loans without documents.
During the search action, the ED teams found and seized unaccounted cash of Rs. 1.08 crore, allegedly received through the Hawala channel gainst exports and also seized voluminous granite dispatch data of 10 years from the quarries.
The searches were conducted at the offices and residential premises of Swetha Granites, Swetha Agencies, Sri Venkateshwara Granites Private Limited, PSR Granites Private Limited, Arvind Granites, Giriraj Shipping Agencies Private Limited and their related entities in Karimnagar and Hyderabad on November 9 and 10.
Some of the companies are associated with state Minister for Civil Supplies and Backward Classes Welfare, Gangula Kamalakar, and his family members. His residence in Karimnagar was also searched by the ED team.
These companies were exporting rough granite blocks to China, Hong Kong and other countries.
“During the course of inquiries, it was found that the exported quantity was more than the quantity on which royalty was paid and there was under reporting of the quantity while exporting. In many instances, the export proceeds were not realised in the declared bank accounts, thereby indicating that the export proceeds were received through other than banking channels,” the ED said in a statement.
The ED search teams also found multiple benami bank accounts held in the name of employees of granite exporters, in which cash received against the illegal granite exports was being deposited.
ED said the investigation on illegal granite mining and FEMA violations was initiated on the basis of a report by the Vigilance & Enforcement Department of the state government wherein large-scale evasion of Seigniorage fee on granite blocks transported from the quarry lease areas in Karimnagar district to the sea ports by railway route was detected and demands for the evaded royalty were raised but not paid by the exporters.
(The story has been published via a syndicated feed.)