The Enforcement Directorate (ED), Ahmedabad Zonal Office, conducted coordinated searches at multiple premises linked to Megh Shah and Mahendra Shah in Ahmedabad and Mumbai on August 7 and 8, as part of an ongoing probe into alleged foreign exchange violations under the Foreign Exchange Management Act (FEMA), 1999, the central agency said on Monday.
High-Value Seizures
During the searches, officials seized Rs 15 lakh in cash, four luxury cars including a BMW X6M, Bentley Continental GT, BMW 730 LD and BMW 328i. They also recovered imported watches from brands such as Rolex and Cartier, collectively valued at Rs1.51 crore. Stamps and cheque books of nearly 40 companies were also recovered.
Earlier Gold Seizure Triggered Probe
The ED operation stems from an investigation triggered by a major seizure earlier this year, when the Directorate of Revenue Intelligence (DRI) and the Gujarat Anti-Terrorism Squad (ATS) jointly recovered nearly 88 kg of gold from Mumbai-based share trader Mahendra Shah and his son Megh Shah’s flat premises in the Mahalakshmi area of Paldi, Ahmedabad. Of this, about 52 kg bore foreign markings linked to Dubai, Australia and Switzerland, raising suspicions of large-scale smuggling through illicit import channels. Alongside the gold, officials seized 19.66 kg of studded jewellery and over Rs 1.37 crore in cash. The total haul was valued at more than Rs 80 crore.
Role of Mahendra Shah
According to findings reported by the DRI and ATS, Mahendra Shah, father of the main accused Megh Shah, is allegedly one of Gujarat’s biggest black money converters. He is alleged to have operated a network to turn unaccounted cash into legal assets for a 15 percent commission. Investigators have alleged that the Shahs were part of a sprawling gold smuggling and money laundering syndicate with more than 500 operatives. The network is also believed to have allegedly facilitated hawala transactions to fund gold imports.
Both Megh and Mahendra Shah have been absconding since the initial raids. Mahendra Shah was allegedly spotted at a Mumbai bar during the crackdown and was heard boasting of political connections. Investigators also claim the case has uncovered a wider nexus involving stock market fraud, high-interest lending to builders and other financial crimes.
Money Trail Still Being Tracked
With large amounts of cash and gold already recovered, agencies are actively tracing the money trail. They suspect that more individuals and businesses could be linked to the racket.
