ED Raids Multiple Locations in FEMA Violation Probe Linked to Nagaland-Based Imsong Global Suppliers

The Enforcement Directorate (ED), Dimapur Sub-zonal Office, carried out search operations on Thursday at seven premises across Nagaland, Assam, and Tamil Nadu in a case involving violations of the Foreign Exchange Management Act (FEMA).

The case is based on information against Imsong Global Suppliers Co., a Nagaland-based entity that claims to be engaged in exporting human hair to companies in Tunisia and Italy.

Search actions were undertaken under Section 37 of the FEMA, as the foreign remittances received by the entity were deemed suspicious.

During the searches, crucial evidence, documents, and digital devices relating to the foreign remittances received by Imsong Global Suppliers Co. were seized. The entity was found to have received over Rs 50 crore in foreign remittances from companies based in Italy and Tunisia. However, despite a considerable lapse of time, it failed to submit requisite export documentation- such as shipping bills and export invoice copies- to its Authorized Dealer Bank within the prescribed timelines. This non-compliance with export obligations and the suppression of documentary evidence constitute contraventions of FEMA provisions and several directions issued by the Reserve Bank of India (RBI).

It was also discovered that the foreign remittances received by Imsong Global Suppliers Co. were diverted to a group entity, Inchem India Private Limited, under the pretext of purchasing human hair. Notably, Inchem India Private Limited, which had been dormant for a considerable period, was reactivated in 2015.

This revival coincides precisely with the period when Imsong Global Suppliers Co. began receiving large foreign remittances. The funds received in the bank accounts of Inchem India Private Limited were further diverted to entities in Chennai engaged in the trading of human hair, followed by immediate debits.

However, the authenticity of the purchase of human hair from these Chennai-based entities by Inchem India Private Limited could not be established. Consequently, the genuineness of the purchase of human hair by Imsong Global Suppliers Co. from Inchem India Private Limited, and the corresponding exports made, also remains unverified.

Furthermore, the timing of Inchem India Private Limited’s revival, in tandem with the inflow of foreign funds to Imsong Global Suppliers Co., strongly suggests that its sole purpose was to act as a conduit for diverting funds received under the guise of exports. One of the directors of Inchem India Private Limited has also stated that he is unaware of the company’s activities and only receives remuneration for lending his name as a director.

The searches resulted in the seizure of crucial digital and documentary evidence. Further investigation is in progress.