A file photo of Niranjan Hiranandani
| Photo Credit: Karuunakaran M

The Enforcement Directorate (ED) has questioned billionaire businessman Niranjan Hiranandani, the promoter of prominent Mumbai-based realty company Hiranandani Group, in a foreign exchange violation case, official sources said on Monday.

The 73-year-old real estate tycoon is understood to have submitted some documents to the federal probe agency as he recorded his statement in the case.

ED investigates alleged FEMA violations

Mr. Hiranandani and his son Darshan Hiranandani were asked to join the investigation by the ED at its office in Mumbai as part of a probe being conducted against them under the Foreign Exchange Management Act (FEMA).

Darshan Hiranandani has been living in Dubai for the past several years.

About four premises of the group in and around Mumbai were searched by the agency last month. The realty group, established in 1978, has developed office and residential projects in Powai in central Mumbai and neighbouring Thane.

Apart from some foreign transactions, the agency is stated to be probing into the beneficiaries of a British Virgin Islands-based trust allegedly linked to the Hiranandani Group’s promoters. The group has said it will cooperate with the ED in this FEMA investigation.

Not connected to Mahua Moitra, say sources

Official sources said this ED probe is not linked to another FEMA investigation being conducted against TMC leader Mahua Moitra, who was recently expelled as a Lok Sabha MP.

BJP MP Nishikant Dubey had accused Moitra of asking questions in the Lok Sabha to target the Adani Group and Prime Minister Narendra Modi at the behest of Darshan Hiranandani in exchange for gifts.

Ms. Moitra has denied any wrongdoing and claimed she was being targeted as she had raised questions on the deals of the Adani Group.

Paytm said its associate Paytm Payments Bank Limited does not undertake outward foreign remittances.
| Photo Credit: Reuters

“The Enforcement Directorate (ED) has questioned senior Paytm executives and taken submission of documents from them following the recent Reserve Bank of India (RBI) action of barring Paytm Payments Bank Limited from accepting deposits or top-ups in any customer account,” official sources said on February 15.

The Central agency, according to the sources, is conducting preliminary examination of documents before it decides to launch a formal investigation into the RBI-flagged alleged irregularities at the fintech company under the Foreign Exchange Management Act (FEMA).

“Some documents have been recently submitted by Paytm executives following which they were asked certain questions. Some more information has been sought,” the sources said.

The Paytm Payments Bank debacle | Explained

“As of now, no irregularities have been detected and a case under FEMA will only be registered once any contravention under the said law is found,” they added. “An investigation under the Prevention of Money Laundering Act (PMLA) involving Paytm is already going on for some time,” they said.

One97 Communications, which provides financial services under the Paytm brand, and its banking arm Paytm Payments Bank have been receiving notices and requests for information with respect to customers of the respective entities, an exchange filing by the company said on February 14.

Paytm said its associate Paytm Payments Bank Limited does not undertake outward foreign remittances.

“One 97 Communications Limited (OCL), its subsidiaries and its associate, Paytm Payments Bank Limited, have over time been receiving notices and requisition for information, documents and explanations from the authorities, including Enforcement Directorate (ED), with respect to the customers that may have done business with the respective entities, and provided the required information, documents and explanations to the authorities,” Paytm said in a regulatory filing.

Paytm said the company and its associate have continued to provide information, documents and explanations to the authorities as required by them.

Also read: Paytm sees ₹300-500 crore blow as customers won’t be able to top up wallets, PPBL accounts

Earlier this month, the Enforcement Directorate and the Financial Intelligence Unit (FIU) asked the RBI to share its report on the recent action taken to bar Paytm Payments Bank Limited from accepting deposits or top-ups in customer accounts, according to sources.

The Central bank, on January 31, directed it to stop accepting deposits or top-ups in any customer accounts, wallets, FASTags and other instruments after February 29.

The ED has been probing Paytm and other online payment wallets as part of its money-laundering investigation against Chinese-controlled mobile phone apps who allegedly laundered funds using merchant IDs created on these fintech platforms.

The FIU has also sought the report from the RBI to analyse whether Paytm or PPBL followed the required procedures as a “reporting entity” under section 13 of the PMLA.

Under this section of the anti-money laundering law, a financial institution, bank or intermediary has to furnish details to the FIU about maintaining records of all transactions and documents evidencing identity of its clients and beneficial owners as well as account files and business correspondence relating to its clients.