ED Seizes Rs. 1.50 Crore in Cash, Uncovers Major FEMA Violations by Sree Gokulam Chits in Kerala and Tamil Nadu
(Judicial Quest News Network)
The Directorate of Enforcement (ED) launched search operations on April 4th and 5th, 2025, targeting locations in Kozhikode, Kerala, and Chennai, Tamil Nadu, under the provisions of the Foreign Exchange Management Act (FEMA), 1999. The searches took place at the residential and business premises of M/s Sree Gokulam Chits and Finance Co Pvt Ltd, revealing a staggering Rs. 1.50 Crore in cash and several incriminating documents.
The ED’s probe was sparked by intelligence reports indicating that the company had been illegally collecting subscriptions to chit funds from individuals residing outside India without the required approvals. Additionally, these subscription amounts were being received in cash, breaching the regulations set by the Reserve Bank of India (RBI). This activity violated Regulation 4(b) of the Foreign Exchange Management (Permissible Capital Account Transactions) Regulations, 2000, as well as Circular No. 107 issued by RBI in June 2015.
Further investigation has uncovered that M/s Sree Gokulam Chits and Finance Co Pvt Ltd had amassed Rs. 371.80 Crore in cash and Rs. 220.74 Crore through cheques from non-resident individuals. Large cash payments were also made to foreign residents, violating Section 3(b) of FEMA, 1999. The investigation is ongoing as ED delves deeper into the alleged violations.
