ED Conducts Raids On Chowgule Group Companies In Goa and Mumbai Over Offshore Money Trail Allegations

Mumbai: The Enforcement Directorate's (ED) Goa unit recently conducted search operations on three companies belonging to the Chowgule group: M/s Chowgule & Company Private Limited (CCPL), M/s Chowgule Steamship Limited (CSL), and PP Mahatme & Company.

Simultaneously, raids were carried out at seven residential premises occupied by members of the Chowgule family, as well as their group's chartered accountant (CA) and former managing director, Pradip Mahatme, and chief financial officer (CFO) Mangesh Sawant.

These actions, conducted under the provisions of FEMA, across various locations in Goa and Mumbai. During the search operations, various incriminating documents and digital devices were recovered and seized by the ED.

According to the ED statement they initiated an investigation based on credible information, which revealed that these entities had created various offshore structures in which approximately US $228mn (million) were diverted from Indian companies over the years by routing it through multiple foreign subsidiaries and step down subsidiaries based in Guernsey, UK and Marshall Islands.

According to reliable sources, Chowgule Steamships Ltd (CSL), the flagship entity of the Chowgule family, has listed Guernsey-registered Quail Investments Ltd as a promoter group entity, holding approximately a 6.23% stake in the company.

However, Quail Investments was incorporated in 1973 and dissolved in 1974, and has not filed any annual returns since then. Moreover, there is absolutely no information available about the promoters of Quail Investments beyond post box no 86 at Julian's Court, Guernsey.

This revelation raises significant questions. Firstly, how could a non-existent company from Guernsey, Quail Investments, have provided a substantial loan of Rs 823.25 lakh to Chowgule Steamship Overseas Ltd (CSOL), a wholly-owned subsidiary of CSL, repayable on demand at an interest of 3%pa (per annum) in FY20-21. How would a company that does not exist be in a position to provide a loan.