noni

Foreigners’ Illegitimate Properties



Published on: December 29, 2012 - 00:31

More in: Opinion


The recent order for confiscation of 14 properties owned by foreigners mainly in Morjim in North Goa by the Enforcement Directorate (ED) suggests that despite legal action against foreigners who purchased property in contravention of the provisions of the Foreign Exchange Management Act (FEMA), many of them continue to buy properties in various parts of the state.

The properties are both houses and land. Most of the properties are in Morjim and Anjuna. Most of the buyers were Russians, followed by Britons. Their modus operandi was to set up a company with the ostensible purpose of doing business. They did not purchase properties directly, but through dummies. The land or house was first purchased by a company registered by an Indian but with foreigners as shareholders or directors - the ‘real investors’ who later took over ownership of the property from the Indian shareholders. The foreigners used this route to side-step the rule which allowed a foreigner to purchase a property only after a stay in India for 183 days. The dummies were chosen to register a company by way of a short-cut.

Such purchases were obviously questionable, as nobody knew who the sources of funds for making these purchases were, as also what were the actual businesses these companies were doing. To allow an increasing number of foreigners on tourist visa to purchase land and houses in coastal belt in violation of FEMA was definitely inviting trouble. It made Goa look like a small banana republic where any criminal-minded foreigner could buy land and do whatever he wanted. The number of such foreigners continued soaring, and is estimated to be more than a thousand. In early 2000s, the Goa government had set up a committee headed by the senior official, Mr Anupam Kishore, which had identified 480 illegal property purchases and referred about 300 of them to ED as prima facie FEMA violations were noticed in those cases.

http://www.navhindtimes.in/opinion/f...ate-properties

dreadsoc

I am sure this is an exact repeat of an article the Navhind Times printed about 4 years ago.
In which case, they are clearly rumour mongering in light of the setting up of this Goan DoE office ?

Sit back and wait to see if this is recent would be my advice.

Dread - x

a_f_d

My thoughts exactly.
It also chimes nicely with the CM's sudden enthusiasm for 'special status'. He's not a fool, he must know that the present Govt can't even get its financial bills passed, a Constitutional Amendment Bill is just not do-able (even if the govt wanted it, which it doesn't). I wonder which group he feels he has to appease just now?

AndyD 8-)₹

dreadsoc

I am not liking this sudden regurgitation of this by the press.

Dread - x

dreadsoc

I am aware that someone in Candolim received a show cause notice today.

I am told that the DoE are stating that the residency requirement of 182 days was not completed prior to money being transferred into India to pay for the property and giving this as the reason for proposed confiscation.
Seem to think an issue similar to this came up on a show cause before and when challenged by a lawyer the DoE backed off again....

Dread - x

noni

Changed the goal posts again. All the people who registered the same day with us completed their residency after their apartments were completed. It seems that so many of us will be caught in this trap.
I seem to remember that when my husband went before them, they asked this question.

I have also heard that the D of E are looking into foreigners bank accounts, this all makes uncomfortable reading.

a_f_d

They are full of sh¦t - you can pay in full on a Agreement for Sale which, as the Supreme Court re-stated last year, does not involve a transfer of property - so FEMA does not apply at that stage.

I hope the people concerned have informed the BHCI - and that they have responded!

AndyD 8-)₹

noni

I have heard of another two who have had confiscation notices served on them.

dreadsoc

Absolutely correct Andy....there is no law whatsoever that prevents a foreigner from entering into an Agreement of sale, and it is perfectly lawful to pay in full when entering into an agreement of sale.

No way would this stand up in the High Court even if DoE did try to confiscate.
Yet again we have "an interpretation" of a tiny sub section of FEMA by a govt admin employee !!!!!!!!!!!!

Dread - x

noni

http://www.youtube.com/watch?v=c5ruhRPdo9M#t=7m.26s

Enforcement Directorate pursuing illegal purchase of property by foreign nationals.

federicoPa

I have been told that the British Business Group of Goa has involved the British Consulate on the problems that foreigners face registering their legally purchased properties, since these registrations seem to have been stopped last year.

The British Consulate is supposed to plan to do something (I do not know what...).

Does anybody has some more information about this matter ?

johnny five

Yes, registrations were stopped several years ago, at least 5, not last year.


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dreadsoc

Hi Federico

First of all welcome to BE and the Goa forum.

To answer your question in very brief summary : the registrar of Goa was closed to foreigners in early 2007, including to foreign directors who purchased via their companies.
Additionally the Goan Directorate of Enforcement began serving numerous show cause notices on foreign nationals who had purchased properties in Goa and registered the said properties prior to the closure of the registrar to foreigners.
As a consequence, there were a handful of actual confiscation orders made by the Directorate of Enforcement...which I believe are still going through the appeals and courts processes, therefore no ACTUAL confiscations have taken place.

The British High Commission are well aware of the situation and have been involved in this for several years. The British Business Group have also made representation, however they tend to be more concerned with large scale high finance businesses as opposed to the small tourism related companies through which many foreigners purchased properties in Goa.

The BHC did state that some foreign directors had been able to register their proeprties via their companies in the last couple of years, but I have yet to encounter any case where this has occurred.

I am wondering if you made your post because you are considering purchasing (or know someone who is or has) I would strongly suggest that unless you are a PIO/NRI/OCI (ie Indian origin) you avoid purchasing a property in Goa or anywhere else in India.
If your post was made because you or someone you know has purchased and is having problems, please make 2 more meaningful posts then pm me the details as I may be able to assist/advise.
I would also suggest that to answer your question fully you read the whole of this 'Buyer Beware' thread, which will give you the full picture....and detailed accounts of the level of curruption and extortion now going on in relation to property purchsed by foreigners in Goa.

Dread - x

dreadsoc

SHOW CAUSE NOTICES

Apparently another show cause notice was received by a British couple in Candolim today.

I have now actually seen the show cause notice I reported on here previously and confirm that the details are as I stated. The one I am told of today was issued to another in the same apartment complex.

I have not seen this latest show cause notice but I am told that the original purchasers were a British couple who purchased off plan in 2002 bu5t registered in around 2005. That couple have sold to the current occupants but only on a 10 year lease.
It is suggested that a show cause notice was served on the original purchasers, who have responded stating they no longer own the property, and naming the new occupiers, and the new occupiers on the 10 year lease have received the notice today and summoned for a hearing in literally two days time!

Dread - x

federicoPa

Many thanks, dreadsoc, for your welcome and for the information

In fact I know very well a foreign couple that has registered the purchase through an indian company (active in the tourism field), of which they are the only shareholders and directors.
The registration has been made during the 2008 or even the 2009, for sure not before.

Now I am in the same position of these people : indian company, me and my wife as the only shareholders and directors, and the scope of the company is in the tourism business.

The competent subregistar office is Mapusa but now I understand that the a lawyer that is following the matter for me, is not so optimistic as she was in the past.....

Of course any suggestions will be extremely welcome.

Unfortunately I did not know this interesting forum before

bye

federico