NEW DELHI: At least eight cases of Foreign Direct Investments (FDI) in some obscure real estate companies — each worth more than $100 million — from Singapore have come under the scanner, with the income tax's overseas unit (ITOU) having investigated them for alleged round-tripping.
Suspicion was raised when authorities detected huge FDI flowing into some little-known real estate firms in India in the form of equity participation. Not much was known about these firms or the nature of their business either in India or Singapore and also from where the funds were routed through FDI.
A senior finance ministry official said they suspect these real estate firms to be front entities of some corporate houses and their black money has been routed through Singapore to acquire real estate in the country. The Mumbai and Chennai directors general of I-T investigation have been asked to probe these cases in India.
Sources said enforcement agencies in Singapore are working closely on these cases with India's I-T officials, posted in the Indian mission there as part of ITOU. Details related to these eight FDI cases have been sent to India for further investigation and to identify the beneficiaries.
All these FDIs coming from Singapore pertain to 2011. India received Rs 1.74 lakh crore worth of FDIs in 2011-12 of which Singapore contributed third highest at Rs 24,700 crore, after Mauritius at Rs 46,700 crore and the UK at Rs 45,000 crore.
The government has allocated Rs 18 crore in the current year for these overseas I-T units to investigate cases of round tripping. I-T has set up such units in at least 10 countries, including the US, the UK, France, Germany, Japan, the Netherlands, Mauritius, Singapore, Cyprus and UAE, which probe investment flows from abroad.
Singapore, Mauritius, the Netherlands, Cyprus, British Virgin Island, UAE, Cayman Islands and Channel Islands dominated the list of destinations where most of the India's outbound investments were made in the three years since 2009-10. Like the suspect cases of FDI coming to the real estate sector, at least 40% of India's outbound investments too had gone to realty in some of these tax havens.