The Enforcement Directorate (ED) has reportedly issued a showcause notice to Swetha Granites and Swetha Agencies belonging to the family members of Civil Supplies Minister Gangula Kamalakar for alleged violation of the Foreign Exchange Management Act (FEMA), to the tune of ₹4.8 crore in the export of granite blocks to China.
This move follows the ED’s investigation into violation of the FEMA provisions and the subsequent searches conducted by the Agency on the premises of Swetha Granites and Swetha Agencies besides a few other granite firms owned by some granite barons in Karimnagar and Hyderabad in November last year, sources said.
The ED had initiated the investigation based on the State Vigilance and Enforcement Department’s earlier report on certain irregularities in granite mining and export of granite blocks.
The investigation found large-scale evasion of seigniorage fee on granite blocks transported from the quarry lease areas of Telangana’s Karimnagar district to the seaports in Andhra Pradesh by Railways, sources said. The probe has also revealed ‘underreporting’ of quantity of the granite blocks by the errant exporters and ‘unaccounted’ money transactions between some Chinese and Indian entities, suspected to be ‘hawala transactions.’
The two Karimnagar-based granite export firms have paid only ₹3 crore in royalty to the government as against the total outstanding dues amounting to around ₹50 crore, sources added.
It may be mentioned that Karimnagar-based advocate B. Mahender Reddy approached the ED in July this year seeking a detailed probe into ‘unaccounted money transactions’ of some errant granite export companies with Chinese entities allegedly owned by Li Wenhuo, whose name appeared in Panama leaks.
Meanwhile, Mr Gangula Kamalakar told the media here on Tuesday that he was not aware of any notices from the ED to the Swetha Granites and Swetha Agencies.
“The two firms belonging to our family have never committed any mistake in the last three decades of business,” he said, adding that all the documents were submitted by the firms whenever the agencies concerned sought them, as per the regular procedures.
“We are law-abiding citizens and ready to give whatever clarification or documents they need and reply to notices, if any issued,” the minister said, brushing aside allegations of irregularities in export of granite to foreign countries.
