Russian firm moves to save four properties in Goa

PANJIM, SEPT 24
The Russian firm facing possible confiscation of its properties in Goa has now decided to seek a stay on Government’s action through Foreign Exchange Regulation Authority appellate.
The lawyer for True Axis Resorts Private Limited, whose four properties at Morjim are under confiscation process, said the appeal against the confiscation is already pending with the appellate.
“We will ask for a stay on Government’s action as the matter is subjudice”, Vikram Varma, representing the firm told Herald.
He said State Chief Secretary Sanjay Srivastava will also be petitioned informing about the case pending in Delhi-based appellate. “No action should be taken until judicial decision in this matter comes”, Varma said.
True Axis company, which claims to be an Indian entity, has two Russian partners holding its hundred per cent shares. The investment by Russians – Valiulin Rashid and Leonid Beyzar, has come under Directorate of Enforcement scanner.
The DE after its inquiry had ruled that the purchase of property was in violation of Foreign Exchange Management Act and hence should be confiscated.
The State Cabinet last month had decided to move ahead with the confiscation of four properties owned by the firm valued at Rs 1.26 crore.
Varma said that foreign direct investment is allowed in hospitality sector and since the amount is less than Rs 20 crore, there is no requirement of RBI clearance for the same.
He said the company was floated with authorized capital and if the confiscation happens then it will reflect on relations between India and Russia.
“People will be wary of investing in India, if this happens as the company has procured all the requisite permissions to buy the property”, Varma added.
Approximately 400 properties owned by foreigners in Goa were referred to DE by a committee led by Anupam Kishore. The committee had found that there were prime facie FEMA violations while purchasing these properties which were mostly in the coastal belt.
The issue was also raised in the Assembly and then chief minister Pratapsingh Rane had assured to probe these purchases.
The ire against foreigners’ properties had begun when local tenants raised their objection to the property purchases.
Ghate, a youth leader, along with the villagers had tilled the paddy field, which was being illegally sold to a foreigner in a beach village of Morjim, on July 16, 2006.
The protest paid off with the State Government taking cognizance of the case, in which the property was sold to a Russian company allegedly by keeping the tenant in darkness.