New Delhi: On Wednesday, the Enforcement Directorate (ED) executed coordinated searches at roughly 17 locations spread across Kolkata, Delhi and Bengaluru. The operation forms part of a broader inquiry into alleged breaches of the Foreign Exchange Management Act (FEMA) involving the engineering conglomerate McNally Bharat Engineering Company Ltd (MBECL).
The raids targeted premises that are either owned by the company, connected to individuals who participated in its recent acquisition, or associated with ancillary entities. This move follows MBECL's entry into the Corporate Insolvency Resolution Process (CIRP) before the National Company Law Tribunal (NCLT), where a resolution plan submitted by BTL EPC received approval.
ED officials are scrutinising the origins of the capital that facilitated the takeover of MBECL, as well as a series of financial transactions linked to the firm. A key focus of the investigation 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 be barred from directly owning the company.
Materials seized—including documents, ledgers and electronic records—are presently being examined to piece together the flow of funds and the nature of the alleged violations. To date, none of the individuals or entities whose properties were searched have issued a public response.
