Real scandal: Dead men buying property in Goa

In Goa, forming name-sake companies which allows 100% FDI has been a major route for investing in properties. This easy route, adopted often
in collaboration with locals looking to make a quick buck is responsible for many foreigners violating Fema that governs all land sales made to foreigners in India.

“In many cases, a person with a small shack buys huge land else where. We have also found cases wherein a dead person is named as an Indian partner to the business deal which clearly indicates that the deals are not genuine,” says Anupam Kishore, joint secretary, Debt Management, who headed an inquiry into foreign land deals in Goa.
Senior bank officials too admit that a ‘large share’ of their foreign business in Goa deals with property purchases.

Official records point that since Fema came into force in 1999, nearly 500 foreigners own property in Goa, mostly British and Russians. The state government has now sent 482 transactions for inquiry to the enforcement directorate.

Fema allows a person of foreign national with a business visa to procure land in India after staying in the required state for 182 days in the preceding financial year. The individual must also have papers for either long-term employment in that place or for carrying on business/vocation there. A foreigner can also purchase land purely for personal use — like a holiday home. In both cases the foreigner has to prove his intentions to stay in Goa for an uncertain period of time.

However, land can also be jointly bought/registered with an Indian partner, where the paper work becomes simple after the foreign person spends mandatory 182 days in Goa. According to government sources, this joint route while used to seek permission for commercial purposes like running a restaurant, shack or be rented out; is often also used for drug trafficking — all done hand in glove with the local (Indian) partner.

In a recent meeting with RBI governor Duvvuri Subbarao, Goa chief minister Digambar Kamat has asked for changes in Fema rules granting state greater control in land sold to foreigners. Besides this, the state will soon be empowering registrars to refuse registration of deals made to a foreigner if it’s not in ‘public good’. This, they say, will help put a ‘blanket ban’ on sale of land to foreigners.

The government’s strong move against foreigners has come post the ghastly murder of British teenager Scarlett Keeling last February. While locals have been blamed of murdering the girl, questions were also raised about how tourists were so easily allowed to extend their visas.

Meanwhile, the state government’s move has already frightened many foreigners who claim that they are being simply harassed for being an ‘outsider’. “A lot of people have been left stranded. Being under investigation, they cannot even sell their property and go back.

These people have put in their entire savings here and don’t know what to do,” claims advocate Vikram Verma who has assisted many foreigners in buying their dream homes in Goa. So while enforcement directorate is yet to charge those with fraudulent deals, for Goans, its time the foreigners went home.

Source: EconomicTimes