New Delhi: On Wednesday, the Enforcement Directorate (ED) swept through approximately 16‑17 locations spread across Kolkata, Delhi and Bengaluru as part of a new probe into possible breaches of the Foreign Exchange Management Act (FEMA) involving McNally Bharat Engineering Company Ltd (MBECL).
Scope of the searches
The raids targeted premises directly tied to MBECL, individuals linked to its recent acquisition, and a cluster of ancillary entities. The operation follows MBECL’s entry into the Corporate Insolvency Resolution Process (CIRP) before the National Company Law Tribunal (NCLT), where the resolution plan presented by BTL EPC received approval.
Key investigative angles
ED officials are scrutinising the financial streams that facilitated the takeover of MBECL, mapping out a web of transactions associated with the company. A central question is whether the insolvency framework was leveraged to enable an indirect re‑acquisition of control by parties who, under Section 29A of the Insolvency and Bankruptcy Code (IBC) 2016, would have been barred from directly owning the firm.
Evidence collection and responses
During the searches, agents seized documents, ledgers and other financial records, all of which are now under detailed examination. To date, none of the persons or organisations whose premises were searched have issued a statement or comment.
"The focus is on tracing the source of capital and assessing whether the insolvency process was used as a conduit for an indirect takeover," an ED spokesperson said.
