ED Slaps FEMA Violation Case Against Bengaluru-based Developer

Bengaluru: The Enforcement Directorate (ED) has filed a complaint against Bengaluru-based real estate promoter Errol Fernandes and his family for alleged violations of the Foreign Exchange Management Act (FEMA), 1999, involving foreign remittances amounting to ₹20.56 crore.

The Bengaluru Zonal Office of the ED initiated action under Section 16(3) of FEMA and submitted a formal complaint to the Adjudicating Authority, which has now issued a show cause notice to Fernandes and his family members.

According to ED sources, the case stems from credible inputs suggesting large-scale contraventions of FEMA provisions between 2017 and 2024 by Fernandes, the promoter of Ferns Estates and Developers.

Investigations revealed that ₹3.67 crore was transferred abroad by Fernandes and his family under the Liberalised Remittance Scheme (LRS) for the stated purpose of investments. However, on redeeming these investments, the proceeds were reportedly retained overseas for an extended period before being brought back to India, in violation of remittance norms.

More significantly, the ED found that an additional ₹16.88 crore was remitted abroad under the guise of “family maintenance.” However, the agency’s probe concluded that no immediate family members or relatives of the accused were residing overseas during that time. Instead, the funds were allegedly used for investments abroad. These proceeds too were eventually brought back to India, but with considerable delays.

The ED has cited these actions as violations of FEMA provisions, leading to the current proceedings.

Further adjudication in the case will depend on the response to the show cause notice and subsequent hearings before the Adjudicating Authority.

Donate for fearless journalism