INDIA. Mumbai: Directorate of Enforcement (ED) seized Rs. 8.26 crore in the case of Bangalore-based Pigeon Education Technology India Private Limited, under Section 37A of the Foreign Exchange Management Act, 1999, on Friday.
The company has been providing online education under the name “Odaclass”. The ED, during search and seizure action against the company last month, found that the company is 100% owned by Chinese nationals and that all the affairs of the company, including financial decisions, were being taken by the persons sitting in China.
“During the investigation, it was ascertained that the company siphoned off Rs.82.72 crore to China and Hongkong in the name of advertisement and marketing expenses on the instructions of Chinese director Liu Can,” an ED statement read.
The company could not produce any proof of receipt of service on its part or proof of any advertisement published against the said expenses. Further, the director and accounts manager of the company admitted during the investigation that the payment was made only on the instructions of Chinese director Liu Kan.
The Indian director of the company, Vedanta Hamirwasia, stated that the Chinese director told them that the said advertisements were published through Google and Facebook, however, no confirmation or invoice raised by these platforms was submitted.
Pigeon Education Technology India Private Limited, a private company, was incorporated on August 30, 2019. It is classified as a non-government company and is registered at the Registrar of Companies, Bangalore.
It may be recalled that similarly, the ED seized Rs 5,551.27 crore from the Chinese manufacturer “Xiaomi India”, under FEMA in connection with illegal remittances made by the company. Xiaomi India is a wholly owned subsidiary of the China-based Xiaomi Group.