ED Search on Opal Engineering Corporation for FEMA Violations.

Headnote:

The Directorate of Enforcement (ED) conducted search operations at four locations linked to Opal Engineering Corporation (OEC), Phagwara, for alleged violations of FEMA, 1999. OEC, an exporter of engineering goods, was found to have received export payments from unrelated third parties, diverted proceeds into personal accounts, and engaged in improper adjustment of export receivables, contrary to FEMA guidelines and RBI norms. ED recovered ₹22 lakh in cash, incriminating documents, and electronic evidence. Investigation is ongoing.

Background:

• ED (Jalandhar Zonal Office) carried out searches on 14.11.2025 at four locations in Phagwara, Punjab under FEMA, 1999.

• The operation targeted premises associated with M/s Opal Engineering Corporation (OEC), engaged in exporting engineering products.

• OEC exported goods to countries including Syria, Iran, Turkey, and Colombia.

• As per ED findings, export proceeds were not realised according to FEMA norms and RBI Master Circulars.

• Instead of receiving payments from actual foreign buyers, the firm accepted payments from unrelated third parties located in different countries.

• Some payments were also received in personal bank accounts, violating foreign exchange regulations.

• There were no tri-partite agreements or supporting documents to justify the adjustment of payments from unrelated entities.

• The firm used a fake Customs email address to falsely establish authenticity of these adjustments.

• Evidence also indicated settlement of export transactions in cash, both within India and abroad.

Court/Authority’s Observations (as per ED Press Release):

• Receiving export proceeds from unrelated parties without proper agreements violates FEMA provisions.

• Failure to realise export proceeds as prescribed under RBI and FEMA guidelines constitutes a regulatory breach.

• Use of fake Customs email IDs and cash settlement of export transactions demonstrate deliberate attempts to circumvent lawful procedures.

• Searches led to recovery of ₹22 lakhs in Indian currency, along with incriminating documents and electronic evidence.

• The investigation continues to determine the full extent of irregularities and foreign exchange violations.

Legal Provisions Discussed:

• Foreign Exchange Management Act, 1999 – Compliance with export realisation norms.

• RBI Master Circulars on Export of Goods and Services – Mandatory realisation and repatriation requirements.

Citation: Press Release dated 16.11.2025

Case: Directorate of Enforcement (ED), Jalandhar Zonal Office – FEMA Investigation

Authority: Directorate of Enforcement (ED), Government of India

Date of Action: 14 November 2025

Legal Provision: Foreign Exchange Management Act, 1999 (FEMA)