India Cements sees ‘no material impact’ of ED searches in FEMA probe

Chennai-based cement manufacturer India Cements Ltd, which also owns the IPL franchise Chennai Super Kings, on Thursday gave a clarification about Enforcement Directorate’s searches at the company’s offices.

Two office premises in Chennai and one in Delhi were covered by the federal probe agency over the last two days, as per provisions of the Foreign Exchange Management Act (FEMA), reported PTI.

In a stock exchange filing, the company said, ” Certain Officials of “Enforcement Directorate” visited our Corporate Office in Chennai during 31.01.2024 and 01.02.2024 and conducted a search to find out if any irregularities concerning “FEMA”. We have provided/ undertaken to provide all the clarification / documents sought by them.”

It also said that it doesn’t “anticipate any material impact” due to the investigation.

The probe pertains to the affairs of its associate company India Cements Capital Ltd (ICCL) and transfer of funds abroad worth about Rs 550 crore, reported PTI earlier on Thursday.

The role of some alleged dubious agents and directors are under the probe scanner of the ED, the report said.

Founded in 1946, the company said on its website that “while retaining cement over the years as its mainstay, India Cements has ventured into related fields like shipping, captive power and coal mining”.

India Cements reported a loss for the third quarter on Thursday, hit by subdued demand due to a slow down in construction activity ahead of elections and cyclone in some states.

The southern India-focused cement maker reported a loss of Rs 16.5 crore in the quarter ended Dec. 31, compared with a profit of Rs 90.7 crore a year ago.

One of the market leaders in southern India, India Cements has been impacted by construction activity slowing down with the elections in Telangana, the cylone in Tamil Nadu, parts of Telangana and a moderated demand in the festival season.