The Enforcement Directorate on Thursday said it carried out searches against a Bengaluru-based online education company, fully owned and controlled by Chinese nationals, for allegedly violating the foreign exchange law and remitting Rs 82 crore to China ‘illegally’.
ED sleuths searched two locations of Pigeon Education Technology India, which provides online education under the name ‘Oda Class’, under the provisions of the Foreign Exchange Management Act (FEMA).
“The company is 100% owned by Chinese nationals and is part of a group consisting complex web of entities having ultimate controlling company in Cayman Islands,” the ED said in a statement.
The present directors of the company, it said, are Liu Can, a Chinese national, and Vedant Hamirwasia.
“The entire affairs of the company are controlled by Liu Can from China and the Indian director has no control or access to the affairs of the company and he follows all the instructions of Chinese persons,” the agency claimed.
The Chinese director is the authorised signatory in all the bank accounts of the company maintained in India and the same are being operated online through China, it said.
“The company remitted around Rs 82 crore to China in the name of marketing expenses on the instructions of the Chinese persons without having proof of availing any services from the beneficiary entity,” it added.
During the searches, incriminating documents and forensic data from electronic devices have been seized and the role of the former directors of the company, Sushant Srivastava, Priyanka Khandelwal, and Himanshu Garg (who resigned last year), is also under investigation, the ED said.
The main purpose of the Foreign Exchange Management Act, 1999 enacted by the Parliament of India, is to revise and streamline the regulations pertaining to foreign exchange. Its goal is to make external trade and payments more convenient and to promote the methodical growth and upkeep of the foreign exchange market in India.
(Disclaimer: The PTI article has been modified to add context.)