The Enforcement Directorate (ED) has issued a show cause notice to Vasan Health Care for an alleged foreign exchange violation of Rs 2,262 crores. Vasan’s promoters, the Advantage Strategic Consulting, and its directors, besides Karti Chidambaram, have also been issued a notice in connection with alleged foreign exchange rule violations involving Rs 45 crores, according to an ED official.
In a series of tweets, the Enforcement Directorate also said it served a notice on two Chennai firms. “ED serves notice to M/s Advantage Strategic Consulting for Rs 45 crore for FEMA contraventions in sale of Vasan Shares to overseas investors.” Apart from this, the ED also served notice to Vasan Health Care Pvt Ltd for FEMA contraventions to the tune of Rs 2,262 crore.
The official said a notice was also served on two foreign investors, seeking their response to allegations of multiple Foreign Exchange Management Act (FERA) contraventions.The Chennai-based Vasan Health Care is said to have received investments from one of the largest venture capital firms, Sequoia and West Bridge, based in Mauritius, and also from the investment arms of global firm GIC-Singapore.
“The overseas investors acquired Vasan’s compulsorily convertible preference shares directly from the company, against the investment of Rs.432 crore in different phases from February 2009 to November 2014. The shares were acquired at the face value of Rs.100 each,” said the official.
According to the ED, the amount relating to alleged contravention by Advantage Strategic in the sale of Vasan shares is about Rs.45 crore. Therefore, show-cause notices have been issued to the company, its directors, and Karti, who “appears to be the controller and ultimate beneficiary in these transactions”.
He said under the Prevention of Money Laundering Act, the ED is also probing the FIPB approval given to Aircel-Maxis deal by former Finance Minister P. Chidambaram. It is alleged that in the approval for Rs.3,500 crore inflow of funds from abroad, the Cabinet Committee on Economic Affairs was the only competent authority. The then Finance Minister was authorized to approve inflows till Rs.600 crore.