ED: Rs 100 crore worth transactions by Vivek, wife with ‘non-existent’ firm

The searches confirmed the ‘bogus nature’ of Vigilance Security Services Pvt. Ltd. which was found ‘non-existent’ at its declared addresses, the ED said.

Hyderabad:  The Directorate of Enforcement (ED), which conducted searches under provisions of the Foreign Exchange Management Act (FEMA), on residences and offices of Congress leader and Chennur candidate Gaddam Vivek (G Vivek) on Tuesday, have found transactions worth over Rs.100 crore by Vivek, his wife and their company Visaka Industries with a ‘bogus’ and ‘non-existent’ firm. FEMA violations were also noticed in the incorporation of an entity by Vivek in a foreign tax-haven country, the ED said.

According to a press release issued by the ED here on Wednesday, the searches were conducted at the residences of Vivek at Hyderabad as well as the office premises of Visaka Industries Ltd. in Hyderabad and Vigilance Security Services Pvt. Ltd. at Ramagundam. Searches were also conducted at his temporary place of residence at Hitech City, Mancherial, it said, adding that the investigation was initiated on the basis of a reference from the Telangana Police to investigate a transaction of Rs.8 crore from the bank account of Vivek to Vigilance Security.

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The searches confirmed the ‘bogus nature’ of Vigilance Security Services Pvt. Ltd. which was found ‘non-existent’ at its declared addresses, the ED said.

“ED investigation revealed that the bank account of M/s Vigilance Security was being used to circuitously transfer money with no real business rationale and that Dr. G.Vivek, his wife and their company Visaka Industries had transactions of more than Rs.100 crore with M/s Vigilance Security,” it said.

“Search operations resulted in the recovery and seizure of digital devices and incriminating documents indicating suspicious and unaccounted transactions worth several crores as well as use of unaccounted cash in property deals. Seized documents also revealed large scale Inter-Corporate Deposits within group companies having no legitimate business but holding huge land assets. Searches also confirmed the bogus nature of Vigilance Security Services Pvt. Ltd. which was found non-existent at its declared addresses,” it said.

“The entity declared mere Rs.20 lakh as ‘revenue from operations’ in its latest balance sheet whereas it reported assets worth Rs.64 crore mainly in the nature of long term loans/advances. Since inception, credit and debit transactions in the company’s impugned bank account was found to be more than Rs.200 crore. Investigation also revealed indirect control of Dr. G.Vivek over M/s Vigilance Security,” the ED press release said, adding that the investigation also revealed, prima facie, FEMA contraventions by Vigilance Security Services Pvt. Ltd. and its parent company Yeshwant Realtors, whose majority shares are held by a foreign national.

“Prima facie, FEMA violations were also noticed in the incorporation of an entity by Dr. G. Vivek in a foreign tax-haven country,” it said, adding that further investigation was under progress.