Ireo Group siphoned off homebuyers’ Rs1,225 crore to tax havens, ED tells court

“The modus operandi adopted by the group includes routing of funds to India from various entities based in tax havens like British Virgin Islands and Mauritius; recording of fictitious expenses in the books of account; writing off project in progress; interest-free loans and advances to sister concerns; round-tripping of funds through shell companies; and creation of assets within and outside India,” the agency’s complaint said, adding that the money had been diverted in the form of redemption, purchase, transfer and buy-back of shares or foreign currency deposits—in violation of the country’s foreign direct investment policy and other laws.

The court on Friday took cognisance of the complaint, which is equivalent to a chargesheet.

The economic intelligence agency, after arresting Goyal in New Delhi last year, had made a mention of The Indian Express investigations into the Pandora Papers, which revealed that Goyal had moved an estimated $77 million in the form of investments, shareholding and real estate, even as homebuyers and investors ran from pillar to post for their money. As he was preparing to go abroad, Goyal was detained at Indira Gandhi International Airport on November 11, 2021, based on a lookout circular opened against him.

In its complaint, the agency alleged that Goyal is “settlor and named beneficiary” of an overseas trust that owns and controls entities holding assets outside India. “Recent Pandora Papers Leak has also named four entities–‘beneficially owned’ by Lalit Goyal–which are holding assets of more than $77.73 Million (Rs575 crore approximately) overseas,” it said.

The central agency said it had initiated the money laundering investigation on the basis of cases registered by Haryana police, Delhi police’s economic offences wing, and the Hauz Khas police in Delhi against Ireo Private Ltd, Ireo Fiveriver Private Ltd, Lalit Goyal and others. There have been 30 cases against the company.

The agency also said that 1,050 homebuyers and investors of various projects, namely Ireo Fiveriver, The Corridors, Ireo City, Gurgaon Hills in Haryana and Ireo Waterfront Township in Punjab, among others, were yet to get the flats or plots and they had paid for four-five years ago. “Investigation further reveals that the Ireo Group of companies could not complete its projects due to diversion and siphoning of funds,” the agency’s complaint said.

The agency has also been probing a Foreign Exchange Management Act case against the company since 2010.

The Ireo Group’s flagship Ireo Private Limited is reeling from losses — it reported a loss of Rs 500 crore in 2018-19.

According to revelations from the Pandora Papers investigation, Goyal, whose sister is married to BJP leader Sudhanshu Mittal, had moved assets, investments, and shareholdings worth an estimated $77 million to an offshore trust structure, which included four entities registered in the British Virgin Islands — much before the group got into trouble. This was revealed in internal documents of Trident Trust, a global corporate services company.

According to these documents, Goyal had provided the address of his Singapore residence and set up the Oak Veneer Trust in Guernsey, a tax haven in the English Channel, with Standard Chartered Trust (Guernsey) Ltd as a trustee. Goyal is the “settlor” — one who sets up the trust—of the Oak Veneer Trust. He and Standard Chartered Trust (Guernsey) Ltd – by virtue of its being a trustee of Oak Veneer— are the “beneficial owners” of the four offshore entities, all of which were acquired either to hold property, shareholdings and investments, or to be an “investment vehicle”.

Responding to the October 12 report of The Indian Express on behalf of Goyal, Sasttra Legal, Advocates and Solicitors, said he was a non-resident Indian as per the latest assessment filed with Indian tax authorities. “It is reiterated that all investments made by Mr Lalit Goyal are legitimate and no monies from homebuyers have either been invested or ‘illegally siphoned’ off,” the law firm had said.