Govt calls high-level meet on FEMA notice to Pak airline
The government has convened a high -level meeting of finance and security officials in order to chart the next course of action in the case of alleged foreign exchange violations in purchase of properties here by Pakistan's national airliner PIA.
New Delhi: The government has convened a high -level meeting of finance and security officials in order to chart the next course of action in the case of alleged foreign exchange violations in purchase of properties here by Pakistan's national airliner PIA.
The meeting has been called by the Finance Ministry next week and it will be attended by officials from RBI, Department of Economic Affairs (DEA), Department of Revenue, Ministry of Home Affairs, Ministry of External Affairs and the Enforcement Directorate (ED).
The ED, last month, had issued a notice under the Foreign Exchange Management Act (FEMA) to the local office of Pakistan International Airlines (PIA) in connection with its purchase of six flats near the tony market area of Connaught Place in central Delhi.
"The meeting will discuss the legal position and the future course of action after the ED issued a FEMA notice to the neighbouring country's national airline. The case is not a regular one as it has assumed diplomatic overtones," sources privy to the development said.
They said local PIA officials had last week met the ED investigators in reply to the summons and put forth their official position on the purchase of the flats situated on the 5th-6th floors of 'Narayan Manzil' in Barakhamba Road area.
The case dates back to 2005 when the Pakistani carrier, which operates two flights a week on the Delhi-Lahore sector and once a week on the Mumbai-Karachi sector, purchased these immovable assets as part of its logistical requirements for its operations in India.
The Department of Economic Affairs had last year written to the RBI asking it to check the validity of these purchases, and after finding prima facie violation of the FEMA, RBI asked ED to issue summons in this regard and investigate the matter.
Officials said the alleged contravention by the airline seems to be in a clause in the FEMA which stipulates that "no person being a citizen of Pakistan, Bangladesh, Sri Lanka, Afghanistan, Iran, China, Nepal or Bhutan without prior permission of the RBI shall acquire or transfer immovable property in India other than lease, not exceeding five years."
ED had issued summons to PIA for scrutiny of official documents and records of purchase in this regard. After an analysis of these, the agency will decide to either initiate penal action, which can either be levy of financial penalty or cancellation of the purchase deal, or summary closure of the case if no illegalities are found.
Officials said the financial probe agency has obtained land and ownership documents of the flats/properties in question from relevant government agencies and subsequently it had sought PIA's version in the case, of which a part reply has been furnished.
The MEA, during an official briefing last month, had said that "..It is a normal routine thing."
The agency has been probing cases of similar nature in the beach state of Goa where it has registered close to 200 cases where foreigners have acquired immovable properties in alleged violation of FEMA laws and RBI rules.