KOCHI: Enforcement Directorate (ED) has seized Rs 1.5 crore in cash during a search operation at the offices of Gokulam Group and the residence of its Chairman, Gokulam Gopalan.

The search, which concluded on Saturday, was part of an ongoing probe into alleged violations of the Foreign Exchange Management Act (FEMA).

According to ED officials, the operation was conducted by the Kochi Zonal Office team at the Sree Gokulam Chits and Finance office and Gokulam Gopalan’s residence in Chennai, beginning on Friday.

A parallel search was also held at the group’s office in Kozhikode. In addition to the cash seizure, several incriminating documents were recovered.

In a press statement, the ED revealed that the investigation was initiated based on specific intelligence indicating that Sree Gokulam Chits and Finance was collecting subscriptions for chit funds from persons residing outside India, without proper authorisation from the competent authority. “Further, the subscription amounts were being collected in cash, in violation of regulations framed by the Reserve Bank of India (RBI),” the statement noted.

This activity constitutes a violation of Regulation 4(b) of the Foreign Exchange Management (Permissible Capital Account Transactions) Regulations, 2000, read with RBI Circular No. 107 dated June 11, 2015.

“The investigation found that the company had collected an amount of Rs. 371.80 Crore in cash from the persons resident outside India and Rs 220.74 Crore in cheque from persons resident outside India. It was also revealed that significant amounts were paid in cash to the persons resident outside India in violation of Section 3(b) of FEMA, 1999,” stated in the press release.