New Delhi: On Wednesday, the Enforcement Directorate (ED) executed coordinated searches at roughly 17 premises across Kolkata, Delhi and Bengaluru as part of a fresh FEMA (Foreign Exchange Management Act) probe involving engineering conglomerate McNally Bharat Engineering Company Ltd (MBECL).
Premises linked to the company and its acquisition network
The raids targeted locations associated with MBECL itself, entities linked to the recent acquisition, and other ancillary firms believed to be part of the same corporate web. The operation follows the completion of MBECL’s Corporate Insolvency Resolution Process (CIRP) before the National Company Law Tribunal (NCLT), wherein the resolution plan submitted by BTL EPC received formal approval.
Key investigative angles
ED officials are scrutinising the origin of the capital that facilitated the takeover of MBECL, as well as a series of financial movements tied to the company’s accounts. A central question is whether the insolvency mechanism was strategically employed to enable parties—potentially barred under Section 29A of the Insolvency and Bankruptcy Code (IBC), 2016—to indirectly re‑acquire control of the business.
Evidence collection and current status
During the searches, investigators seized documents, ledgers and other financial records, all of which are now undergoing detailed forensic analysis. None of the individuals or organisations whose premises were searched have issued any public response to date.
“The ED’s action underscores a broader intent to ensure that insolvency processes are not misused to circumvent regulatory safeguards,” a senior ED spokesperson noted.
