New Delhi: The Enforcement Directorate on Saturday said it has seized cash and gold worth more than Rs 12 crore from the premises of a Hyderabad-based auditor as part of an investigation into alleged foreign exchange violation.
The action came after raids were undertaken on August 23 under the Foreign Exchange Management Act (FEMA) at the office of Brightcom Group Ltd., residences of its CEO M Suresh Reddy and CFO SLN Raju and the residence and office of its auditor P Murali Mohana Rao.
The ED probe stems from a Securities and Exchange Board of India (SEBI) investigation regarding impairment of assets worth Rs 868.30 crore by Brightcom Group through its subsidiaries abroad, the federal agency said in a statement.
“Incriminating documents and digital devices were seized including unaccounted cash of Rs 3.30 crore and gold jewellery and bullion worth Rs 9.30 crore from the residence of auditor, P Murali Mohana Rao (of P. Murali & Co.).”
“The residential premises of M Suresh Reddy were sealed,” it said.
The probe found that Brightcom Group financed preferential issues by “round-tripping” funds through subsidiaries and conduit entities and that it falsely claimed to have received full payment for preferential shares/warrants by providing “forged and fabricated bank statements” to the SEBI.
“It was found that more than Rs 300 crore, advanced as loans to subsidiaries, were partly siphoned off or remained unaccounted,” the ED alleged.
The statutory auditors, P Murali & Co. and PCN & Associates (related entity of P Murali & Co.), apart from failing to report outright fraud, “colluded” with the management/promoters of the company, it said.