InvestorQ : What could be the impact of the Rs.700 crore forex scam on the stock markets?
Archita Jajjoo made post

What could be the impact of the Rs.700 crore forex scam on the stock markets?

Answer
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Rashi Mehra answered.
7 months ago


The ED has been conducting raids at select offices where the ED believes that Capstone Forex issued foreign exchange to select companies against fake passports and fake air tickets. Capstone had received large transfers of funds from a number of business houses and corporates which was used to issue foreign currency. The problems are two-fold. When the ED investigated, the companies that had made transfers to Capstone were questioned they could not give a satisfactory answer to the reasons for the transfer of funds. Secondly, Capstone had procured foreign exchange from other authorized dealers (ADs) using fake passport and tickets, which is an offence under the FEMA. ED estimates the impact to be Rs.700 crore but it could be bigger. As to stock market impact, it may be limited for now.