Karan Chanana, head of the worldwide rice model Amira, is being investigated by ED over claims that financial institution loans had been unlawfully diverted into shell entities and is but to reply to the allegations. He is believed to have donated round GBP 220,000 to the Conservatives via his British firm Amira G. Foods since September 2019.

Margaret Hodge, a senior Labour MP and chair of the All Party Parliamentary Group (APPG) on Anti-Corruption and Responsible Tax, instructed the ‘Guardian’ newspaper on Saturday that the Tories ought to set up the supply of those funds and freeze the cash till the inquiries are accomplished.

“The Tories have been too dependent on major donors and have not been doing proper checks. They should now be forced to do so by new legislation,” she instructed the newspaper.

It comes after studies from Delhi revealed that the ED performed search operations on May 2 at 21 areas in India related to Chanana, the Indian firm Amira Pure Foods and different events underneath the Prevention of Money Laundering Act. Charges are but to be filed within the case because the ED says additional inquiries are persevering with.

“Investigations revealed that the accused entities in connivance with each other as well as other related/unrelated entities have illegally diverted loan funds sanctioned by the consortium of banks by way of transferring loan funds into the accounts of various shell entities under the guise of genuine business transactions,” the newspaper quoted an ED assertion as saying.

“It was also known that Karan A Chanana had donated to a political party of [the] United Kingdom since 2019… while the accused entity had itself defaulted on repayment loans,” the assertion provides.

Amira Nature Foods was listed on the New York inventory change in October 2012, specialising in Indian basmati rice grown within the foothills of the Himalayas. Chanana, its chairman and chief govt, operated the enterprise from its headquarters within the Gold Tower in Dubai, whereas its official firm registration was within the British Virgin Islands.

Its subsidiaries included Amira Pure Foods in India, now underneath investigation, and Amira G. Foods within the UK, based on company filings.

The probe in India follows a consortium of banks headed by Canara Bank submitting a report with the Central Bureau of Investigation (CBI) in November 2020 alleging financial institution fraud.