ED conducts searches on B C Jindal Group over alleged FEMA violations, ₹505 crore remittance under probe

The Enforcement Directorate (ED) on Wednesday (September 24) said it conducted search operations under the Foreign Exchange Management Act (FEMA), 1999, on September 18 and 19 at 13 premises linked to the group companies of B C Jindal and Shyam Sundar Jindal, their directors, and other office bearers. The searches were carried out in Delhi NCR and Hyderabad following suspicions of FEMA violations.

The probe focuses on overseas investments and alleged round-tripping of funds by the B C Jindal Group, particularly Jindal India Thermal Power Ltd. (JITPL), Jindal India Powertech Ltd., and Jindal Poly Films Ltd. (JPFL). Investigations revealed that between FY 2013-14 and FY 2016-17, JPFL invested ₹703.79 crore in Jindal India Powertech Ltd, which in turn funded JITPL for a coal-based thermal power project in Odisha.

Instead of recovering the investments, JPFL wrote off the amount in FY 2018-19 and sold it to its own promoters and group companies at a significant loss. In May 2024, JITPL redeemed preferential shares, paying ₹853.72 crore to JIPL, of which ₹505.14 crore was allegedly siphoned to Shyam Sundar Jindal’s personal entity, Topaz Enterprise DMCC, Dubai, to acquire 100% of Garnet Enterprise DMCC.

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Garnet Enterprise DMCC holds a 48% stake in Jindal Polyfilm Netherlands B.V., which further controls step-down subsidiaries including JPF Dutch B.V. and JPF USA Holding LLC. Documents recovered during the searches indicate that Shyam Sundar Jindal is the beneficial owner and key decision-maker of Topaz Enterprise DMCC and related overseas entities.

The ED noted that the ₹505.14 crore remittance was allegedly routed through sham transactions and inflated share valuations. The group reportedly holds multiple overseas entities in the Netherlands, USA, Belgium, Italy, Luxembourg, Singapore, China, UAE, and Germany, potentially contravening FEMA provisions. Shyam Sundar Jindal was not in India during the searches and has yet to join the investigation.

Further investigation into the alleged irregularities and overseas fund routing is ongoing.

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Shares of Jindal Poly Films Ltd ended at ₹588.05, down by ₹7.35, or 1.23%, on the BSE.