Forex violation case: ED summons Niranjan Hiranandani, Dubai-based son on Monday

MUMBAI: The Directorate of Enforcement (ED) has summoned Niranjan Hiranandani, co-founder and managing director of real estate developer Hiranandani Group, and his son Darshan Hiranandani in a forex violation case. It asked them to appear at the agency’s south Mumbai office on Monday. Darshan Hiranandani was informed by email as he is a non-resident Indian (NRI) and lives in Dubai, people aware of the matter told ET.The agency has registered a case against the Hiranandanis and group entities under the Foreign Exchange Management Act (Fema), they said. On Thursday, the federal agency conducted searches at four sites linked to the realty firm in and around Mumbai, including Niranjan Hiranandani’s home as well as the registered and corporate offices of group entities.

“There are certain transactions with which the duo need to be confronted and therefore they have been summoned on Monday,” said an official aware of the development. Ordinarily, while summoning a person for the first time in a case, the agency allows the option of being represented through legal counsel.

Probe Limited to FDI, Says Co
“ED search is over. We’re not aware of anything further. We shall be submitting further documents (if required),” a Hiranandani Group spokesperson told ET in an email.

The members of the Hiranandani family have been facing probes by multiple agencies, including the income tax department and the Central Bureau of Investigation (CBI). In November, the CBI registered a preliminary enquiry into allegations of corruption against Trinamool Congress MP Mahua Moitra. She had been accused of asking questions in the Lok Sabha in exchange for cash and gifts from Darshan Hiranandani. In an affidavit to the Committee on Ethics of the House on October 19, 2023, Hiranandani said Moitra had shared her log-in ID and password for the Lok Sabha members’ website. Moitra was expelled from Parliament in December.

The ED is investigating the Hiranandanis over foreign direct investments (FDI) of more than Rs 400 crore received in group companies around 20 years ago linked to real estate projects in Maharashtra and Tamil Nadu. It is alleged that the group violated FDI norms and used funds for other purposes.

“As gathered, the utilisation of the amount was not as per the prescribed government guidelines,” said another official aware of the development. One of the group entities that received the FDI did not repay loans taken from a consortium of banks and those were declared NPAs (non-performing assets). Interestingly, the incomplete project was then taken over by another Hiranandani Group entity during DRT (Debt Recovery Tribunal) proceedings.”

In 2012, UK-listed Hirco Plc, erstwhile investor partner in a 400-acre township project in Chennai, filed a case against the builder alleging misrepresentation, conspiracy and contractual negligence. In August, 2016, an arbitration tribunal dismissed the claims and ordered Hirco to pay Hiranandani around Rs 160 crore for legal and other costs.

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