On 31 July 2025, the Kochi Zonal Office of the Enforcement Directorate (ED) conducted search operations at two premises in Kasaragod, Kerala. The action was taken under the provisions of the Foreign Exchange Management Act (FEMA), 1999, following suspicions of irregularities in foreign funding involving the Kunhahmed Musliyar Memorial Trust.
ED, Kochi conducted searches on 31.07.2025 in Kasaragod, Kerala under FEMA, 1999 at the premises of Kunhahmed Musliyar Memorial Trust & its Chairman Ibrahim Ahmad Ali (NRI) in a case involving receipt of Rs. 220 Crore foreign contribution without FCRA registration and investing…
— ED (@dir_ed) August 1, 2025
The searches are linked to financial dealings involving the Kunhahmed Musliyar Memorial Trust and its chairman, Ibrahim Ahmad Ali, an NRI. Initial findings suggest the Trust received over ₹220 crore since 2021 from Ibrahim, with the amount entered in its financial records as “unsecured loans.” However, ED noted the absence of any formal loan agreements, interest terms, or repayment schedules and no repayments have been made to date. The funds reportedly originated from Universal Lubricants LLC, a UAE-based firm.
Due to the lack of proper documentation, the ED observed that the transactions appear to fall under the definition of “foreign contribution” as per Section 2(1)(h) of the Foreign Contribution Regulation Act (FCRA), 2010. The issue arises because the Trust is not registered under the FCRA, nor does it hold the necessary approval or designated FCRA bank account required to legally accept such foreign funds.
The investigation also uncovered that a portion of the funds was used to acquire agricultural land, which breaches further legal provisions. Additionally, the Trust is said to have accepted ₹2.49 crore in cash from Ibrahim Ahmad Ali, in violation of FEMA regulations.
During the searches, officials seized several incriminating materials, including financial records, ledger entries labeled as unsecured loans, the Trust’s cash book, and a hard disk containing related data. The ED stated that these findings point to serious violations of FEMA, 1999. The investigation is currently ongoing.
(With inputs from NDTV)
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