RBI favours ED probe into US-based financial institution DE Shaw deals

Posted By: Religare
Subscribe to GoodReturns

RBI favours ED probe into DE Shaw deals
The country's banking regulator, the Reserve Bank of India (RBI) has requested a thorough investigation by the Enforcement Directorate (ED) into the suspicious fund flows of the US financial institution, DE Shaw into many Indian firms. ED probes into allegations of foreign exchange breaches and money laundering cases.

RBI also urged the finance ministry to probe a fake letter, which was probably written by the Department of Industrial Policy and Promotion (DIPP), an arm of the Commerce Ministry. The forged DIPP letter asked for initiating an investigation against DE Shaw on the account of allegations of dubious fund flows into India. The Finance Ministry said that the centre has not directed for any probe on the matter.

RBI has said that it is not its responsibility to keep minute information of all foreign investments routed into the country. The regulator further added that it is on the part of the Indian firms to maintain all details of FDI inflows. The RBI insists that it keeps the FDI data for the purpose of reporting India's Balance of payments (BOP) figures. It only maintains very elementary details of foreign investors such as know-your-customer (KYC) details and overseas bank account details.

A case involving DE Shaw Group's Rs 117 crore acquisitions of 18 percent in the Hindi print media company, Amar Ujala Publications in 2007, is already pending in the Delhi High court. The court has asked RBI, Foreign Investment Promotion Board of India (FIPB) and ministry of Corporate Affairs to give their replies on the case by July 14.The court filed a notice in May this year against DE Shaw. The next hearing on the case would take place on July 14, 2011.

Read more about: rbi, investment, scam, acquisition
Story first published: Tuesday, July 12, 2011, 12:33 [IST]
Please Wait while comments are loading...
Company Search
Enter the first few characters of the company's name or the NSE symbol or BSE code and click 'Go'