x Abu Dhabi, UAEWednesday 17 January 2018

Emaar venture 'violated rules'

The Indian government has said Emaar MGF Land violated foreign exchange rules over US$1.51 billion of investments.

Emaar MGF has developed about 2m square feet of shops in Northern India. Prashanth Vishwanathan/ The National
Emaar MGF has developed about 2m square feet of shops in Northern India. Prashanth Vishwanathan/ The National

The Indian government has said Emaar MGF Land violated foreign exchange rules over US$1.51 billion of investments.

According to a statement from the Indian government yesterday, Emaar MGF Land violated the central bank's foreign direct investment rules under the Foreign Exchange Management Act by using overseas funds to buy agricultural land, which was not allowed, instead of for development projects.

Emaar MGF Land is a joint venture between Emaar Properties and the Indian developer MGF Development.

An external spokeswoman acting for Emaar said: "Emaar MGF has not received any official communication in this regard and has no statement to make on this matter at this point of time."

The news comes three years after officials from India's Enforcement Directorate raided Emaar MGF Land offices in New Delhi for allegedly violating foreign exchange rules.

The company has been operating in India since February 2005 and was set up by the Emaar and Indian property tycoon Shravan Gupta in an attempt to diversify the company's focus away from Dubai.

The company's goal was to focus on high-quality master-planned residential communities such as those Emaar developed in Dubai, usually built around golf courses.

It has developed about 2 million square feet of shops in northern India.

Its present focus is on building homes in Delhi, Hyderabad, Chennai and other key Indian cities.

* with Reuters

 

lbarnard@thenational.ae