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ED questioning Sharma on HFCL shares sale; FII accounts frozen

The Enforcement Directorate is questioning the owner of the First Global Shankar Sharma in connection with the sale of shares of Himachal Futuristic Communications Limited to foreign institutional investors and has partially frozen accounts of these FIIs.

Highly-placed Enforcement Directorate sources said that nearly 10 bank accounts of various FIIs, to whom the shares of HFCL had been sold, were partially frozen for violation of Foreign Exchange Regulation Act.

The sources said the profit earned by these FIIs from the shares were under question and the respective banks had been asked to maintain the profit amount in these accounts.

The ED alleged that Sharma and his wife had violated the provisions of FERA in purchase of shares of HFCL in private placement and transfer of funds of Mauritius to the UK.

The ED alleged that the group headed by the couple, First Global, had purchased 850,000 shares of HFCL in private placement on March three last year at the rate of Rs 1,050 and sold it the same day at the rates ranging between Rs 1,060 to Rs 1,075 to FIIs, which was in violation of FERA directions laid down by RBI and Securities Exchange Board of India.

The ED claimed that the prevailing market price of these shares at the time of transfer was between Rs 1,950 to Rs 2,200 and alleged that no permission was sought by First Global from RBI before transferring these shares to FIIs.

Sharma was remanded to seven days ED custody by a Delhi court on Tuesday as the ED claimed that prima facie it appeared that there was a bungling of Rs 560 million.

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