ED seizes property worth ₹65.53 crore from Venkateshwara Hatcheries in Maharashtra, Karnataka

HYDERABAD: The Enforcement Directorate (ED) has taken possession of nine immovable properties belonging to Venkateshwara Hatcheries Private Limited, with an estimated value of ₹65.53 crore. These properties are spread across the states of Maharashtra and Karnataka.

The ED raided and seized the properties on Monday morning. This seizure was conducted under the provisions of the Foreign Exchange Management Act (FEMA) of 1999.

The investigation leading to this operation was initiated by the ED regarding alleged illegal remittances conducted by the company, dating back to 2011. These remittances were reportedly made through its subsidiary, known as Venky’s Overseas Limited, UK.

The ED's inquiry uncovered that Venkateshwara Hatcheries had declared the business activities of Venky's Overseas Limited to the Reserve Bank of India (RBI) as related to agriculture and mining, specifically the rearing of ducks and hens.

The ED investigation further disclosed that substantial funds were remitted by Venkateshwara Hatcheries under the guise of equity infusion, despite the fact that Venky’s Overseas had never initiated any such business activity even after more than 11 years of its incorporation.

Furthermore, the ED found that Venkateshwara Hatcheries had remitted a total of ₹65.53 crore to Venky’s Overseas since its establishment.

Venky's Overseas Limited, shortly after its incorporation, utilised the funds received from Venkateshwara Hatcheries to purchase a substantial immovable property named “Alexander House” spanning 90 acres in the United Kingdom. This purchase was ostensibly made to provide convenience to the directors and employees of VHPL.

The ED's investigation determined that all the funds remitted by Venkateshwara Hatcheries Limited to Venky’s Overseas were subsequently used to repay a loan obtained by VOL from Barclays Bank, UK, which had originally been taken for the acquisition of the aforementioned immovable property.

The ED alleged that Venkateshwara Hatcheries Limited had established Venky’s Overseas with no genuine intent to conduct bonafide business, asserting that it was essentially created as a front to acquire the immovable property in the UK for the ultimate benefit of VHPL's directors, employees, and their family members.

In light of these findings, the ED deemed this to be a violation of the law and proceeded to seize properties held in India equivalent to the estimated value of the assets held abroad, in accordance with the provisions of section 37A of FEMA.

This is an ongoing investigation, with further inquiries expected to follow.