ED books Kerala charitable trust for ₹220 crore FCRA violation
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New Delhi: The Enforcement Directorate (ED) has registered a foreign exchange violation case against a Kerala-based charitable organisation for allegedly receiving ₹220 crore from abroad in violation of the Foreign Contribution Regulation Act (FCRA).
The investigation centres around the Kunhahmed Musliyar Memorial Trust, located in Kasargod, and its chairman, Ibrahim Ahmad Ali, a non-resident Indian (NRI). According to the ED, the Trust received over ₹220 crore since 2021 from Ali, which was recorded in the organisation’s accounts as “unsecured loans.”
However, the agency noted that no formal loan agreements, defined interest rates, or repayment schedules were presented, and no repayments had been made to date. The funds, as per the ED's probe, originated from Universal Lubricants LLC, a company based in the United Arab Emirates.
In a statement, the ED said that in the absence of adequate supporting documentation and based on clarification provided under a specific section of the FCRA, the purported loan qualifies prima facie as a “foreign contribution” under the Act.
The Trust, however, is neither registered under the FCRA nor holds the mandatory government permission or designated FCRA bank account required to legally receive foreign contributions.
The ED further stated that part of these foreign funds was allegedly used to purchase agricultural land in India, which is in direct violation of applicable foreign exchange and FCRA norms.
In addition, the agency found that the Trust received ₹2.49 crore in cash from Ibrahim Ahmad Ali, a transaction that contravenes provisions under the Foreign Exchange Management Act (FEMA).
ED officials conducted searches on Thursday at two locations in Kasargod in connection with the case. During the operation, they seized incriminating materials, including ledger accounts showing ₹220 crore in unsecured loans, the Trust’s cash book, a hard disk containing financial data, and other key documents.
With PTI inputs