ED searches premises of Congress candidate in FEMA violation case

Hyderabad: ED on Wednesday said that it carried out searches at four locations, including the premises of Congress leader Gaddam Vivekanand as well as the office premises of Visaka Industries Ltd and Vigilance Security Services Pvt. Ltd at Ramagundam, Telangana in connection with a FEMA violation case.

The ED, in a statement, said that the agency sleuths carried out searches under the provisions of the Foreign Exchange Management Act (FEMA) at four locations in Telangana on Tuesday at the residences of Vivekanand, who had switched to Congress from the BJP and is contesting from the from Chennur Assembly constituency in Telangana.

The ED also carried out searches at his temporary place of residence at Hitech City, Mancherial where he was found.

The financial probe agency said that it initiated investigation on the basis of a reference from Telangana Police to investigate a transaction of Rs 8 crore from the bank account of Vivek to Vigilance Security.

The agency said that its probe revealed that the bank account of Vigilance Security was being used to circuitously transfer money with no real business rationale and that Vivek, his wife and their company Visaka Industries had transactions of more than Rs 100 crore with Vigilance Security.

“The entity declared mere Rs 20 lakh as ‘revenue from operations’ in its latest balance sheet whereas it reported assets worth Rs 64 crore mainly in the nature of long term loans or advances. Since inception, credit and debit transactions in the company’s impugned bank account was found to be more than Rs 200 crore,” the ED claimed.

It said that its probe also revealed indirect control of Vivek over Vigilance Security.

ED probe also revealed, prima facie, FEMA contraventions by Vigilance Security Services Pvt. Ltd. and its parent company Yeshwant Realtors whose majority shares are held by a foreign national.

Prima facie, FEMA violations were also noticed in the incorporation of an entity by Vivek in a foreign tax-haven country, the ED said.

Search operations resulted in the recovery and seizure of digital devices and incriminating documents indicating suspicious or unaccounted transactions worth several crores as well as use of unaccounted cash in property deals, the agency said.

The ED said that seized documents also revealed large scale Inter-Corporate Deposits within group companies having no legitimate business but holding huge land assets.

Searches also confirmed the bogus nature of Vigilance Security Services Pvt. Ltd. which was found non-existent at its declared addresses, the ED added.

Vivek, who had recently quit BJP to join Congress party, is contesting November 30 election from Chennur constituency in Mancherial district.

The former MP is the richest candidate in the fray in Telangana. In the affidavit submitted by him to the Election Commission while filing his nomination, he declared family assets of over Rs 600 crore.

Vivek, founder and chairman of Visaka Industries Ltd, also owns Telugu new channel V6.