Did Reliance Violate Fema Rules?

[savramesh 37]

Reliance is under the scanner and it’s the investigation into the Volcker report, which may spell trouble for the company.

Enforcement Directorate, which has been investigating foreign exchange or FEMA violations by companies who bought oil from Iraq a few years ago, has now sought the finance ministry's approval to take the case international.

It wants to send letters of request to Jordan, Iraq and Lebanon because it wants to investigate the $3.5 million surcharge allegedly paid by Reliance Petroleum on oil bought from Iraq. Enforcement Directorate also suspects that this surcharge may have been paid without the requisite permission of RBI and may be a violation of FEMA rules.

However, interestingly the Enforcement Directorate says in its letter, a copy of which is with NDTV, that the then Reliance Petroleum lifted about 15.78 million barrels of oil through Alcon International. Now, even as the government investigation in the matter grinds on, Reliance Petroleum has merged into Reliance Industries and it’s the latter which may have to face up to the consequences of any investigation. Meanwhile, RIL denies any claims of wrongdoing and says that Reliance has always followed national and international laws and norms in all its business transactions.

Also, the firm said that it hadn’t been approached by any government authority in the last two and a half years regarding this issue. The firm further went on to say that it had not violated any rules and regulations laid down by RBI or FEMA and that it had no relationship with the said firm. The ball is now in the finance ministry's court which now has to decide on whether it wants to go ahead with the investigations or not.

Source: NDTV

Edited February 26, 2009 by savramesh