The Enforcement Directorate has issued show-cause notices to Santosh Promoters Private Limited and others for alleged unauthorised hedging of foreign currencies to the tune of ₹905 crore.
The probe is being carried out under the Foreign Exchange Management Act. The notices have been issued to Santosh Promoters; Pennar Trading; Delight Suppliers and its directors Aditya Sarda and Naveen Nayyar; Sachet Saraf, director of Hadwyn Vanijya (earlier known as Marigold Vanijya); Metropolitan Stock Exchange of India Limited and its CEO and MD, Joseph Massey, said the agency.
The unauthorised transactions took place allegedly on the portals of the Metropolitan Stock Exchange of India, the agency said.
The investigation is being carried out on the basis of information received from the Finance Ministry. It is alleged that the companies were “involved in unauthorised speculative dealings of future currency derivative contracts without having any underlying contract or exposure in foreign currency.”
Unauthorised transactions
Santosh Promoters, Pennar Trading and Delight Suppliers, companies of Mr. Sarda, had entered into unauthorised transactions of ₹905 crore in just three days in 2011-12 for making speculative gains on fluctuations in the foreign currency rates vis-a-vis rupee.
“Investigation further revealed that the above companies had no real foreign transactions or any kind of trade or business related to any export/import or any other activity requiring coverage or hedging through foreign currency futures/derivatives trading. The transactions were not backed by underlying exposure or foreign currency whatsoever,” the agency said.
The broker of Hadwyn Vanijya allegedly carried out such illegal transactions without the Reserve Bank of India authorisation, knowing full well that they were speculative in nature, the ED alleges.
