What is Anti Money Laundering Act?
The Prevention of Money Laundering Act is a law brought by the NDA government to prevent money laundering and confiscation of money-laundered assets. The notified rules came into force from 1st July 2005. Banking companies and other financial institutions are even required by law to maintain records to verify the identity of customers. Exchange of foreign funds, foreign money transactions and investment are all covered by the FEMA Act. The law passed earlier as FERA was amended in 1993. There are strict restrictions on foreign exchange transactions under the Act
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Assets worth Rs 1,117 crore of Gujarat-based Rose Valley Group have been seized so far after illegal activities were found in the Income Tax department’s raid. Assets worth Rs 250 crore were also confiscated in the last few days. The case is about defrauding 1000s of investors in Odisha. The owners of the company are serving prison sentences.
In another raid, the bank loan fraud case of the Varon group of companies
Properties worth Rs 12 crore in Maharashtra and Goa were seized. The family of late company owner Srikanth Savaikar has lost Rs 179.27 crore so far. Another company, Designtech Systems Private Limited (DTSPL), has temporarily frozen assets worth Rs 31.20 crore. Naina Jewellers, Aarti Charitable Educational Trust are also firms that have recently lost crores in other states as part of income tax raids.
Malayali businessmen who faced the raid
Income tax department raids recently took place in Kerala too. As part of the raid on Joy Alukas Group, the state’s leading businessman, the Income Tax Department had seized assets worth Rs 305 crore. The raid was conducted on the grounds of violation of the Foreign Exchange Act in Alukas’s firm, which had not committed any investment frauds. A house in Shobha City and some bank accounts are among the confiscated assets. Another Malayali businessman who was recently raided for allegedly violating the same law (FEMA) is Baiju Ravindran, the founder of Byju’s learning app. The raid was conducted in offices in Bengaluru. But the legal spokesperson of Byjus responded that the raid is part of the regular investigations of the Income Tax Department and all necessary information will be provided. In Kerala, a raid has taken place in the last few days, including at the Thrissur office of Manappuram Finance. Investigation is in progress.