Tuesday, Jun 04, 2013
Shefali Anand
An Indian government agency has accused Emaar MGF Land Ltd., a joint venture of Dubai's Emaar Properties PJSC and India's MGF Development Ltd., of violating the country's foreign-exchange rules.
The Directorate of Enforcement, an agency that investigates foreign-exchange violations, said Emaar MGF raised 86 billion rupees ($1.5 billion) under foreign direct investment rules since April 2005 by stating that this would be invested in construction and development projects. But the company and its units used the funds to buy land, including agriculture land, the agency alleged.
The agency said it has sent a notice to Emaar MGF, effectively asking the company to explain why it shouldn't take action against the company. The statement didn't state how much time Emaar MGF has to respond to the notice.
A spokesman for Emaar MGF said the company hadn't yet seen the notice, and so he couldn't comment on the charges. "We emphasize that the company continues to uphold the highest standards of corporate governance and follows the laws of the land," the spokesman said in an email response.
Emaar MGF started operations in February 2005, and has since built several real-estate projects across India.
India's foreign-exchange rules require that in certain cases, companies accepting foreign direct investments have to inform the central how those funds will be used.
Write to Shefali Anand at shefali.anand@wsj.com
(END) Dow Jones Newswires
04-06-13 1459GMT
