Kerala charitable trust under ED scanner for alleged Rs 220 Crore FCRA Violation
New Delhi: The Enforcement Directorate has initiated action against a charitable trust based in Kasargod, Kerala, for allegedly violating foreign contribution rules by receiving more than Rs 220 crore from overseas sources.
The case involves the Kunhahmed Musliyar Memorial Trust and its Chairman, Ibrahim Ahmad Ali, a non-resident Indian, over suspected breaches of the Foreign Contribution Regulation Act (FCRA).
The agency conducted searches under the Foreign Exchange Management Act (FEMA) on Thursday at two locations in Kasargod. In a statement, the ED confirmed that the searches were linked to the Trust’s receipt of large overseas funds.
According to the ED, the Trust received over Rs 220 crore since 2021 from Ibrahim Ahmad Ali. These funds were entered in the Trust’s accounts as “unsecured” loans.
However, the agency stated no loan agreement, interest rate terms, or repayment schedule were available, and no repayment had been made till date.
Funds came through UAE-based company
The ED probe revealed that the foreign money was routed through a UAE-based company named Universal Lubricants LLC.
Due to lack of supporting documentation and based on clarifications under the FCRA, the ED stated that the transaction prima facie qualified as “foreign contribution” under FCRA.
The Trust is not registered under the Foreign Contribution Regulation Act and does not have the mandatory FCRA bank account required to receive foreign funds, the ED noted.
It added that a portion of the foreign money had been “utilised” for the purchase of agricultural land in India, in violation of the existing regulations.
The probe also found that the Trust received Rs 2.49 crore in cash from Ibrahim Ahmad Ali, which is another violation under FEMA rules.
The ED stated, "During the search, incriminating documents, ledger accounts showing unsecured loans of Rs 220 crore, the cash book of the Trust, and a hard disk containing financial data were seized."
With PTI inputs