The Directorate of Enforcement (ED) conducted targeted searches in Telangana on 21st November 2023 under the provisions of the Foreign Exchange Management Act (FEMA), 1999, unearthing a web of financial irregularities. The searches were carried out at four locations, including the residences and offices of Dr. Gaddam Vivekanand, founder of Visaka Industries Ltd., raising serious concerns about dubious transactions.
The raids encompassed Dr. Vivekanand’s primary residence in Hyderabad, the corporate premises of Visaka Industries Ltd. in Hyderabad, and the office of Vigilance Security Services Pvt. Ltd. in Ramagundam. Additionally, investigators found Dr. Vivekanand at his temporary residence in Hitech City, Mancherial.
The ED initiated the investigation following a reference from the Telangana Police, focusing on a substantial transaction of Rs. 8 Crore from Dr. G. Vivek’s bank account to M/s Vigilance Security. Preliminary findings of the ED investigation brought to light a convoluted money trail, indicating that M/s Vigilance Security’s bank account was being used for clandestine money transfers with no discernible business rationale.
Disturbingly, Dr. G. Vivek, his spouse, and Visaka Industries Ltd. were implicated in transactions exceeding Rs. 100 Crore with M/s Vigilance Security. Shockingly, M/s Vigilance Security declared a mere Rs. 20 lakhs as ‘revenue from operations’ in its latest balance sheet, while reporting assets totaling Rs. 64 crore, primarily in the form of long-term loans/advances. Transactions in the company’s scrutinized bank account since its inception surpassed Rs. 200 Crore, revealing an intricate financial interplay.
Furthermore, the investigation exposed the indirect control exercised by Dr. G. Vivek over M/s Vigilance Security. The ED’s scrutiny also pointed towards prima facie contraventions of FEMA by M/s Vigilance Security Services Pvt. Ltd. and its parent company, Yeshwant Realtors, where a significant portion of shares is held by a foreign national. Additionally, FEMA violations were suspected in the establishment of an entity by Dr. G. Vivek in a foreign tax-haven country.
The search operations led to the recovery and seizure of digital devices and incriminating documents, exposing suspicious and unaccounted transactions worth several crores, along with the utilization of unaccounted cash in property deals. Documents seized also brought to light extensive Inter-Corporate Deposits within group companies, lacking any legitimate business justification but holding substantial land assets. Notably, searches confirmed the fictitious nature of M/s Vigilance Security Services Pvt. Ltd., which was found non-existent at its declared addresses.
The investigation is currently ongoing,
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