The Directorate of Enforcement (ED), Kochi Zonal Office recently conducted search operations under the Foreign Exchange Management Act (FEMA), 1999, at locations in Kasaragod, Kerala. The subject of the investigation, Kunhahmed Musliyar Memorial Trust (KMMT) and its Chairman, Mr. Ibrahim Ahmad Ali (an NRI), are alleged to have received substantial foreign funds under circumstances that raise important questions under FEMA and the Foreign Contribution Regulation Act (FCRA), 2010.
Case Facts -
1. 🎯 Over ₹220 crore from 2021 to present, credited as "unsecured loans" from Mr. Ibrahim Ahmad Ali.
2. 🎯 Source of Funds - Mr. Ali received funds from M/s Universal Lubricants LLC, UAE.
3. 🎯 No formal agreement, interest terms, or repayment schedule available; no repayments made.
4. 🎯 The so-called “loan” qualifies as a "foreign contribution" under Section 2(1)(h) of FCRA, 2010 due to lack of documentation.
5. 🎯 KMMT is not FCRA-registered and lacks designated FCRA bank account and permissions.
6. 🎯 Partially utilized for purchase of agricultural land, a regulated activity for foreign-sourced funds.
FCRA Compliance
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