The ED has scheduled a meeting with Niranjan Hiranandani and his son Darshan Hiranandani from the Hiranandani Group on Monday to investigate potential infringements in the area of foreign exchange regulations. The duo was asked to report at the ED's south Mumbai office, with Niranjan Hiranandani being given the option to be represented by a legal counsel if he so chooses.
Darshan Hiranandani, who is currently based in Dubai as a non-resident Indian (NRI), was informed of the summons via email. The ED is investigating allegations that the Hiranandani Group and its promoters violated India's FEMA by bringing in foreign investments for real estate projects in Maharashtra and Tamil Nadu decades ago.
One of these entities is believed to have received substantial foreign investments but failed to repay loans taken from a consortium of banks, leading to its classification as a non-performing asset (NPA). During debt recovery tribunal proceedings, another Hiranandani Group entity reportedly took over the incomplete project. It is alleged that the group misused these funds for purposes other than what was prescribed by the government guidelines.
There are certain transactions with which the duo need to be confronted and therefore they have been summoned on Monday
an official from the Directorate of Enforcement (ED)
Hiranandani Family Under Multi-Agency Investigation
The Hiranandani family is currently under scrutiny through various investigations, including an income tax inquiry and a CBI preliminary examination, as the ED launches its own probe into accusations of corruption involving Trinamool Congress MP Mahua Moitra. During Lok Sabha sessions that took place in November 2023, Darshan Hiranandani is said to have provided Mahua Moitra with financial incentives and presents for asking queries about him.
Niranjan Hiranandani's son, Darshan Hiranandani, currently serves as the chairman of several companies within the Hiranandani Group, such as Yotta Data Services, H-Energy, Tarq Semiconductors, and Tez Platforms. The Hiranandani Group has stated that it will cooperate with the ED in its investigation. Sources close to the matter have clarified that this investigation is not connected to the ongoing probe against Mahua Moitra.
Hiranandani Group Resilient Amidst Allegation
According to reports, Niranjan Hiranandani and his relatives are said to be associated with a BVI trust currently being investigated by the ED. The allegations surrounding the Hiranandani Group's foreign exchange violations date back to over 15 years ago.
During the searches conducted last week, the Hiranandani Group released a statement acknowledging their cooperation with the ED in this matter and citing the time it took to locate old records. The group also mentioned that they were in the process of submitting any additional documents requested by the ED as part of their ongoing investigation.
It is noteworthy that the Hiranandani Group has faced criticism and investigations in the past for various allegations, including tax evasion and financial irregularities. The group's reputation, however, remains strong due to its significant presence in India's real estate sector and numerous successful projects over the years.
Hiranandani's Integrity Tested
The ED's investigation is an opportunity for the Hiranandani Group to address these allegations and clear their name in a transparent manner. Niranjan Hiranandani and Darshan Hiranandani are expected to comply with the summons and cooperate fully with the ED during this probe. The outcome of this investigation could potentially set a precedent for other companies that may have had similar foreign exchange violations in the past.
It is crucial for businesses to maintain strict adherence to regulations, especially when dealing with large foreign investments and funds. The ED's commitment to enforcing FEMA guidelines and investigating potential violations serves to strengthen India's financial regulatory framework.
The Hiranandani Group's response and cooperation during this investigation will play a significant role in shaping public opinion and perceptions of their business practices.