The Enforcement Directorate seized the acquisitions of the owner of the famed Kerala-based jewelry firm Joyalukkas recently in a FEMA lawsuit relating to the company’s suspected movement of a “giant empire” to Dubai using hawala routes. The asset attachment came two days after the federal probe mechanism explored multiple places of the Thrissur-based group controlled by Joy Alukkas Verghese.
Connected asset involves 33 immovable properties (valued at Rs 81.54 crores) involving land and a residential building in Shobha City, Thrissur, three bank deposits totaling Rs 91.22 lakh, three fixed deposits totaling Rs 5.58 crore, and shares in Joyalukkas India Pvt Ltd (valued at Rs 217.81 crore),” the ED stated in a comment. When the documents from probing agencies are studied, it measures that the total value of these acquisitions confiscated under section 37A of the Foreign Exchange Management Act (FEMA) is Rs 305.84 crore.
The retail jewelry firm withdrew its Rs 2,300 crore IPO on February 17 without giving a reason. The profits of the IPO were to be employed for debt repayment, funding the opening of 8 extra showrooms, and general company reasons.
Large sums of money were allegedly transported to Dubai from India using hawala (illegal money transfer) networks and then incorporated in Joyalukkas Jewellery LLC, Dubai, which is 100% owned by Joy Alukkas Verghese.
There are statements from search moments, which provides strong shreds of evidence that the official papers and emails, transparently pointed towards Joyalukkas’ active participation in the illegal, alias hawala transactions. The owner of the so-called reputed jewelry shop was charged with taking the ‘benefits’ from the currency infused in Joyalukkas Jewellers LLC, Dubai.
How does ‘hawala’ affect national security?
Hawala transactions are forbidden under the Foreign Exchange Management Act (1999). ‘Hawala’ money is considered detrimental as it is one of the prominent ways that is used to fund terrorism. As terrorist alliances explore new technology, new operational procedures, and fresh sources of money, their reliance on one conventional mechanism remains unchanged—they continue to use hawala to transport and distribute monies to their cadres and sympathizers across the world.
As a result, attempts by India, the United States, and European countries to close the sources of terrorism financing must involve limiting the hawala system. Nonetheless, this remains a challenging undertaking since the very nature of hawala makes it the most difficult to obtain exact information about all terrorism-related topics.
The withdrawal of Joyalukkas IPO.
Joyalukkas has withdrawn its IPO of 23 billion rupees ($277.95 million), according to a statement on the market regulator’s website. According to the initial prospectus filed in March last year, about 14 billion rupees ($169.16 million) from the IPO profits were to be employed for debt repayment or prepayment. The IPO’s book managers, Haitong Securities India, Edelweiss Financial Services Ltd, Motilal Oswal Investment Advisers Ltd, and SBI Capital Markets Ltd, did not immediately reply to a request for comment. The company, in an earlier matter, sought a Rs 650 crore IPO in 2011 and then canceled it.
Joyalukkas managing director Alukkas Varghese Joy attributed the new change in plan to unfavorable market circumstances, office relocation, and the company’s improved profitability, and hinted that the IPO may take place in FY24. The price of gold, which last month spiked to an all-time high of Rs 57,930/10 gm before plunging as the US Federal Reserve prepared to raise interest rates further, was irrelevant to the decision, according to the owner of the jewelry empire. All gold companies in India did satisfactorily in 2022, according to Joy, with demand maintaining robust despite high prices. He added that the country’s overall use of gold has increased.
About the Joyalukkas.
The jeweler, based in Kerala, has stores in over 68 cities and is one of the country’s largest jewelry sellers. Joyalukkas will restart its growth ambitions in India following a two-year pause due to the epidemic. The business has planned to spend Rs 463.9 crore from the IPO profits on the opening of eight showrooms.
The last verdict depicts the importance of Gold in Indian territory.
Gold jewelry is a classic commodity in India, the world’s second-largest gold market. According to the World Gold Council, global gold demand increased 18 percent year on year in 2022 to 4,741 tonnes, with a robust fourth-quarter performance. However, the World Gold Council said last month that a tide in pricing had resulted in a 3% drop in yellow metal usage in India.
edited and proofread by nikita sharma