The Directorate of Enforcement has seized Rs. 8.26 Crores of Pigeon Education Technology India Private Limited under the Section 37A of the Foreign Exchange Management Act,1999. The organisation, operating under the name Odaclass and offering online education, was 100 percent Chinese and misappropriated Rs. 82.72 crore for China.
The Director and Assistant Director of ED have the authority to conduct an investigation into any Foreign Exchange infringements under Section 37 of the Foreign Exchange Management Act, 1999. Under the Foreign Exchange Management Act, these officials are able to use all of the investigative powers granted to income-tax authorities by the Income Tax Act, 1961.
The ED’s search and seizure, it was revealed that the company as whole was owned by the Chinese nationals and all the affairs of the company including financial decisions are being taken by the persons sitting in China.
Additionally, it was discovered that the business had transferred Rs. 82.72 crores from India to China and Hong Kong under the guise of advertising and marketing costs at the direction of Chinese director Liu Can.
Before the enforcement directorate, the company was unable to present any documentation of the services it had received or of any advertisements that had been run in connection with those expenses. The company’s director and manager also acknowledged that the fraud was carried out at the direction of Chinese Director Liu Can.
Vedanta Hamirwasia, the company’s Indian director, claimed that the Chinese director had informed them that the ad campaigns in question were published on Facebook and Google, but that neither platform had provided any documentation to support this claim. The investigation is still in progress.
Recently, the ED has conducted searches and seizure action at 3 premises (2 Business and 1 residential) in Bengaluru in the case of Raveendaran Byju and his company ‘Think & Learn Private Limited’ under the provisions of Foreign Exchange Management Act (FEMA).
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