Archive · 18 Sep 2026
Karnataka High Court Upholds ED Probe Into Genpact Fund Trail
The Karnataka High Court reviewed a money-transfer case involving Genpact and the Enforcement Directorate.
The case concerns transactions that began in 2015.
Money moved through several Genpact companies in different countries.
The ED said the transactions formed a connected or circular movement of funds.
Genpact India later paid about ₹7,800 crore to Genpact Luxembourg.
The court said the ED had enough material to investigate and seize property in Gurgaon.
However, the court did not decide whether Genpact actually broke FEMA rules.
That final decision must be made by the competent authority.
The court also told authorities to reconsider Genpact’s request for approval of a USD 100-million GIFT City investment.
The Karnataka High Court upheld the Enforcement Directorate’s action under FEMA in the Genpact case.
The court found sufficient material to invoke Section 37A and seize Genpact’s Gurgaon property.
The ED is examining transactions involving a reported ₹7,800-crore fund trail as a connected arrangement.
The court said it was not deciding whether Genpact ultimately violated FEMA.
The court ordered reconsideration of Genpact’s proposed USD 100-million GIFT City investment application.
- Who
- The Directorate of Enforcement, Genpact, Empower India, Morgan Stanley, and the Karnataka High Court are central to the case.
- What
- The court upheld the ED’s FEMA-related seizure and investigation but left the final question of a FEMA violation to the competent authority.
- When
- The judgment was delivered on September 16, 2026; the transactions examined began in 2015, with later payments made between 2018 and 2023.
- Where
- The case concerns transactions involving India, Bermuda, Luxembourg, Singapore, and property in Gurgaon.
- Why
- The ED alleged that the transactions formed a connected arrangement involving movement of funds and invoked Section 37A of FEMA.
Enforcement Directorate and Court
Genpact
Nature of the transactions
Enforcement Directorate and Court
The ED argued that the transactions should be examined together as a connected arrangement and that the fund trail represented circular movement of money.
Genpact
Genpact challenged the ED’s seizure and argued against treating the transactions as a basis for the FEMA action described in the case.
Use of Section 37A
Enforcement Directorate and Court
The court found sufficient material for the authorised officer to form the required reason to believe and upheld the seizure of the Gurgaon property.
Genpact
Genpact challenged the seizure and argued that Section 37A was being applied retrospectively to transactions completed in 2015.
Other regulatory proceedings
Enforcement Directorate and Court
The court held that proceedings before the RBI, SEBI, and Income Tax authorities did not prevent an independent FEMA examination.
Genpact
Genpact relied on those proceedings in challenging the FEMA action, though the court said they had not decided whether the entire arrangement violated FEMA.
- Judgment date
- September 16, 2026
- Initial borrowing
- Genpact Bermuda borrowed USD 737.5 million from Morgan Stanley in March 2015.
- Empower India transaction
- Genpact Luxembourg subscribed to 4,600 non-convertible debentures of Empower India valued at about ₹4,600 crore.
- Fund movement
- Empower India transferred the entire ₹4,600 crore toward acquiring the remaining 51% stake in Genpact India.
- Later payments
- Genpact India paid about ₹7,800 crore to Genpact Luxembourg between 2018 and 2023 toward NCD principal and interest.
- Property action
- The ED seized Genpact’s property in Gurgaon under Section 37A of FEMA.
- GIFT City application
- The court ordered reconsideration of Genpact’s application for an NOC for a proposed USD 100-million investment.