The Union Ministry of Commerce and Industry has asked the Reserve Bank of India to look into the allegations against U.S.-based D E Shaw & Co, LLC, and its subsidiary D E Shaw Composite Investments (Mauritius) Ltd. that it invested dubious source of funds in various entities in India operating mainly in telecom and realty sectors.
In its letter to the RBI's Foreign Exchange Department, the Department of Industrial Policy and Promotion (DIPP) under the Ministry has asked it to ascertain whether the investments made by D E Shaw and its subsidiaries in some companies were made through ‘normal banking channel', and whether shares were issued in “consonance with the share pricing norms and guidelines issued in this regard by the Securities and Exchange Board of India.”
This was ordered last week following a complaint, which has also been received by the Foreign Investment Promotion Board (FIPB) of the Finance Ministry, linking the ‘dubious investments' to the 2G scam. It alleged that D E Shaw and its other entities were large investors in Indian real estate through structures that are in violation of FDI guidelines and FEMA clauses.
The D E Shaw group has presence in India since 1996.
