ED Raids BPTP Ltd: Unearths Foreign Funding Violations
The Enforcement Directorate (ED) conducted search operations on real estate giant BPTP Ltd. for violations of the Foreign Exchange Management Act (FEMA) over foreign funding irregularities, seizing incriminating documents and digital evidence.
FemaForeign FundingReal EstateBptp LtdEdReal EstateAug 29, 2025
The search operations were meticulously executed at the offices of M/s BPTP Ltd. and the residences of its Chairman and Managing Director, Kabul Chawla, and Whole-Time Director, Sudhanshu Tripathi. The ED initiated these investigations based on credible information that M/s BPTP Ltd. had received Foreign Direct Investment (FDI) amounting to over Rs. 500 crore from entities based in Mauritius, in violation of existing FEMA rules and regulations.
Enquiries revealed that the company had received FDI to the tune of Rs. 322.5 crore from M/s CPI India I Ltd., Port Louis, Mauritius, and Rs. 215 crore from M/s Harbour Victoria Investment Holding Ltd., also based in Mauritius. According to the ED, these investments were made under the automatic route during the financial year 2007-2008 and were structured with 'put/swap' options. These clauses provided the foreign investors with guaranteed returns upon exit, which is a clear violation of the then-existing FEMA regulations.
The ED's press statement highlighted that the search operations led to the freezing of bank lockers and the recovery and seizure of significant incriminating documents and digital evidence. These documents revealed that despite specific directives from the Reserve Bank of India (RBI) to amend the shareholders' agreement and remove the impermissible 'put option' clause, M/s BPTP Ltd. failed to comply, thereby violating FEMA provisions and applicable FDI regulations.
Furthermore, the investigation uncovered that Kabul Chawla was the beneficial owner of multiple foreign entities, one of which had previously been used to acquire a costly immovable property in New York, USA. These foreign entities, the overseas property, and the source of funds used for the acquisition are now under scrutiny as part of the ongoing FEMA investigation.
Moreover, the investigation revealed that multiple FIRs have been registered against M/s BPTP Ltd. and its Directors across various police stations in Delhi-NCR. These FIRs are related to the non-completion of various projects for a long period of time and the diversion of funds, which are also subjects of the ongoing investigation.
The ED stated that further investigation is in progress to uncover the full extent of the violations and to take appropriate legal action against the involved parties.
BPTP Ltd. is a well-established real estate company known for its large-scale projects in the Delhi-NCR region. The company has been a significant player in the real estate market, but this latest development has raised serious concerns about its compliance with financial regulations and its operational integrity.
Frequently Asked Questions
What is the Foreign Exchange Management Act (FEMA)?
The Foreign Exchange Management Act (FEMA) is a law in India that regulates foreign exchange transactions and aims to promote the orderly development and maintenance of the foreign exchange market in India. It was enacted in 1999 to replace the Foreign Exchange Regulation Act (FERA).
Why did the ED conduct search operations on BPTP Ltd.?
The ED conducted search operations on BPTP Ltd. due to allegations of violations of the Foreign Exchange Management Act (FEMA) over foreign funding irregularities, specifically the receipt of foreign direct investment (FDI) from Mauritius-based entities in violation of FEMA rules and regulations.
What are 'put/swap' options in the context of FDI?
'Put/swap' options in the context of FDI are clauses that provide foreign investors with guaranteed returns upon exit. These options are impermissible under the then-existing FDI policy and FEMA regulations, as they can lead to speculative investments and financial irregularities.
What was the amount of FDI received by BPTP Ltd. from Mauritius-based entities?
BPTP Ltd. received FDI amounting to Rs. 500 crore from Mauritius-based entities, with Rs. 322.5 crore from M/s CPI India I Ltd. and Rs. 215 crore from M/s Harbour Victoria Investment Holding Ltd.
What other legal issues is BPTP Ltd. facing?
In addition to the FEMA violations, multiple FIRs have been registered against BPTP Ltd. and its Directors across various police stations in Delhi-NCR. These FIRs are related to the non-completion of various projects for a long period of time and the diversion of funds.
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