ED seized Rs. 8.26 Cr of Pigeon Education Wholly Owned by Chinese Nationals under FEMA Provisions

The Directorate of Enforcement has seized Rs.8.26 Crore in the case of Pigeon Education Technology India Private Limited under Section 37A of the Foreign Exchange Management Act,1999. The company is providing online education in the name of Odaclass.

Previously, the ED undertook a search and seizure operation against the firm and discovered that it is 100% controlled by Chinese citizens and that all business decisions, including financial ones, are made by people in China.

During investigation, it was ascertained that the company has siphoned off Rs.82.72 Crore to China and Hongkong in the name of Advertisement and marketing expenses on the instructions of Chinese director Liu Can.

The organisation was unable to offer evidence of service receipt or documentation of any advertisement made in relation to the aforementioned expenditures.

Further, the director and accounts manager of the company has also admitted during investigation that the payment were made only on the instructions of Chinese director Liu Kan.

Vedanta Hamirwasia, the company’s Indian director, alleged that the Chinese director informed them that the aforementioned adverts were placed through Google and Facebook, but no confirmation or invoice raised by these platforms was presented.

Further investigation is under progress.