New Delhi, Nov 22 (IANS): The Enforcement Directorate (ED) on Wednesday said that it has seized movable and immovable properties worth Rs 62.52 crore of Farmax India Limited (FIL), its Managing Director Morthala Srinivasa Reddy and his brother M. Malla Reddy (Executive Director in Farmax India Ltd.) for FEMA violations in GDR (Global Depositary Receipts (GDR) scam case.

It said that the agency has seized the 23 properties worth Rs 62.52 crore under provisions of the Foreign Exchange Management Act (FEMA).

The seized properties include 23 immovable properties of Farmax India Limited, its Managing Director Morthala Srinivasa Reddy and his brother M. Malla Reddy.

The ED said that the seized properties also include equity shares of Farmax India Limited in the name of promoters and the shares of MSR India Ltd. originally held by Morthala Srinivasa Reddy and later transferred to his brother and other family members.

The central agency probe against Farmax India Limited, its promoters, directors and others under the provisions of FEMA in connection with the fraudulent issuance of Global Depository Receipts (GDRs) and non-utilisation of the same for bonafide purposes.

ED investigation revealed that Morthala Srinivasa Reddy, MD of FIL in connivance with Arun Panchariya and others issued GDRs in the name of his company in two tranches in 2010 and did not deliberately repatriate the GDR proceeds worth US$ 71.45 million to India as per the statutory requirements.

Investigation also revealed that 'Vintage, FZE, Dubai' - wholly owned entity of Arun Panchariya was the sole subscriber to the GDRs.

For that purpose, Vintage, FZE, Dubai had availed a loan from EURAM Bank, Viena vide a loan agreement on May 05, 2010.

"Under this agreement, FIL had agreed that the entire GDR proceeds shall be pledged to secure the loan granted by EURAM Bank to Vintage, FZE," the ED said.

The ED said that loan was sanctioned by EURAM Bank to Vintage, FZE solely for the purpose of subscribing to the GDRs and in turn the GDR proceeds received by FIL were pledged for securing the loan advanced to Vintage.

Of the funds raised abroad, US $ 15.60 million was diverted to its subsidiary, Farmax FZE, Dubai, a shell company in UAE and from there to various other entities controlled by Arun Panchariya.

Another US$ 56.57 million was adjusted by Euram Bank against non-repayment of loans by Vintage FZE, the ED said.