They said the notice has been issued under the Foreign Exchange Management Act (FEMA) after an investigation launched few years back in these instances was completed.
The central probe agency has named at least 9 businessmen and entities in the notice including Santosh Promoters Pvt Ltd, Pennar Trading Pvt Ltd, Delight Suppliers Pvt Ltd and former CEO and MD of Metropolitan Stock Exchange of India Joseph Massey.
The ED''s Kolkata office took over the probe in the case on the basis of an information sent by the Union finance ministry few years back.
Officials said the ED''s probe found that the said companies and individuals "were involved in unauthorised speculative dealings of future currency derivative contracts without having any underlying contract or exposure in foreign currency."
Santosh Promoters Pvt Ltd, Pennar Trading Pvt Ltd and Delight Suppliers Pvt Ltd --companies of businessman Aditya Sarda --had entered into unauthorised transactions of Rs 905 crore in just three days in the financial year 2011-12 for making speculative gains on fluctuations in foreign currency rates vis-a-vis rupee, they said.
These companies had no real foreign transactions or any trade or business related to any export or import or any other activity requiring coverage or hedging through foreign currency futures/derivatives trading and the transactions were not backed by underlying exposure or foreign currency whatsoever, an official told PTI quoting the showcase notice.
The currency futures transactions were entered "purely for speculative purposes involving USD", they said.
Metropolitan Stock Exchange of India Ltd was the exchange on whose portals these unauthorised transactions had taken place, they said.
The other entities named in the FEMA show cause notice include Naveen Nayyar, another director of Santosh Promoters Pvt Ltd and two other firms, Hadwyn Vanijya Pvt Ltd (earlier known as Marigold Vanijya Pvt Ltd) and its director Sachet Saraf.
Officials said the probe found that Santosh Promoters Pvt Ltd, Pennar Trading Pvt Ltd and Delight Suppliers Pvt Ltd, companies based in Kolkata, had the same registered address.
The broker Hadwyn Vanijya Pvt Ltd carried out "illegal transactions of future currency derivative contract knowingly that they are speculative in nature", they said.
They did not even have the RBI authorisation in dealing with foreign currency, officials said.
The charged entities have now been asked to present their side before the Special Director of the ED, the Adjudicating Authority designated under FEMA.
If the charges are upheld, these entities can be slapped with a penalty three times the violated amount. PTI NES DV DV
Disclaimer :- This story has not been edited by Outlook staff and is auto-generated from news agency feeds. Source: PTI