Millennium Post

UK’s Standard Chartered gets Rs 334-crore ED notice

Enforcement Directorate (ED) has issued an over Rs 608 crore showcause notice to a Tamil Nadu based Mercantile bank and leading foreign bank Standard Chartered for alleged foreign exchange violations in an illegal transfer of shares case of 2007.

The agency's Chennai office on Thursday issued a Rs 334.32 crore notice to Standard Chartered bank Mumbai while it slapped a Rs 274.03 crore notice to the Tamilnad Mercantile Bank Limited (TMBL) under the provisions of the Foreign Exchange Management Act (FEMA).

The case dates back to 2007 when the RBI detected that certain non-resident investors had acquired shares of TMBL from resident Indian shareholders in violation of guidelines. "The ED conducted investigations and identified that Tamilnad Mercantile Bank, its the then Chairman, Directors, Company Secretary have all contravened the provisions of FEMA in transferring 46,862 shares of their bank to foreign entities in May 2007 without the prior approval of RBI and further allowing similar transfer of shares to foreign entities in December 2011 and June 2012.

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