PANJIM: The Enforcement Directorate on Tuesday issued a Rs 136.93 crore notice under the Foreign Exchange Management Act (FEMA) to mining firm cum iron ore exporter Magnum Minerals Pvt Ltd, for failing to declare export proceeds, under-invoicing exports and for investing foreign exchange under Foreign Direct Investment ( FDI) in overseas. This is the first show cause notice issued by ED in the illegal mining scam.
The company is one amongst 16 mining firms against whom ED has registered Enforcement Case Information Report (ECIR) for illegal mining as identified and mentioned in the report of Central Empowered Committee (CEC) appointed by the Supreme Court, Justice M B Shah Commission report and report of State Legislative Assembly’s Public Accounts Committee (PAC).
The Special Director, ED, Mumbai has issued the notice to Magnum Minerals Pvt Ltd and its Director’s Ravindra Prakash, Prashant Sahu and Michael Smith, following a complaint filed by Panjim Zonal office against the firm under section 16(3) of FEMA, 1999. The complaint highlighted the contraventions committed by the company, its director and officials.
Officials said that based on the complaint filed by the Directorate of Mines and Geology (DMG), in which ECIR has been registered, the Panjim ED zonal office started investigating the under invoicing done by the iron ore exporters from Goa during 2006-12 under the provisions of FEMA.
“The investigation conducted by the office revealed that Magnum Minerals Pvt Ltd had transferred Rs 136.93 crore by way of under invoicing exports and in the guise of investment in the overseas subsidiaries,” official said.
During the investigations, ED observed in detail that the company failed to take all the reasonable steps to repatriate to India the foreign exchange and also failed to furnish the true and correct value of the goods exported in the relevant declaration forms of export concerning the goods exported.
“The company invested in the overseas subsidiaries, that were not found conducting any bona fide activities,” the official said, adding that the company failed to receive share certificates or any other documents as evidence of investments made in its two overseas subsidiaries.
