The Enforcement Directorate’s (ED) probe into suspected money-laundering and foreign exchange violations in the Indian Premier League (IPL) has zeroed in on 18 benaami companies based out of India who have made huge investments in some IPL franchisees.
The probe into these 18 companies, whose stake holdings are not yet known to enforcement authorities here, is expected to be carried out jointly by the ED and the Directorate of Revenue Intelligence (DRI).
Investigators suspect that money may have been moved illegally, in a circuitous route, from India, in establishing these companies, and routed back by these companies into the IPL clubs.
The DRI is expected to help ED probe this bulk money movement and the benaami stake holdings in the IPL teams, in consultation with the Ministry of Corporate Affairs here. Probe so far has shown major chunks of stakes — in teams like the Kolkata Knight Riders, Kings XI Punjab and Rajasthan Royals — whose ownership is not yet known.
Officials connected with the probe said a high level ED and DRI team is expected to be dispatched to Mauritius, Cyprus, and Virgin Islands, where these benaami companies are supposed to be based. “We are waiting for the government’s nod to take the probe abroad,” said a senior ED official.
So far, investigations into the cricketing scam were being largely conducted by the Income Tax authorities, whose purview was restricted to violation of the tax laws.
After ED registered a case against unknown persons, the scope of the scam has now broadened to include suspected violations of foreign exchange management norms and strong possibilities of money having been moved illegally through the hawala channel.
Over a dozen top hawala operators based in Pune, Chandigarh, Delhi and Mumbai are under the scanner of ED and DRI. Probe officials said the role of some key hawala operators, based in Pune, has emerged very clearly. Some hawala operators have already been questioned.
The Income Tax authorities have already initiated the process of transfer of documents of IPL franchisees, seized during investigations, to the ED. “Preliminary investigations have started. We have received some documents from the Income Tax department,” said a senior ED official.
