Fraud of Rs 549.22 crore; ED likely to investigate Messi event scam, report submitted to govt

THIRUVANANTHAPURAM: A special GST investigation team appointed by the government found that a fraud amounting to Rs 549.22 crore was committed under the pretext of bringing football legend Messi to Kerala. The entire scam was orchestrated by the principal sponsor, Reporter Broadcasting Company. Irregularities such as money laundering, unauthorised foreign exchange transactions, secret US dollar account dealings, unaccounted non-banking loans, income tax evasion, and stamp duty evasion were uncovered. State government agencies failed significantly to prevent these violations. The report has been submitted to the government.

The team recommended handing over the investigation to central agencies, including the Enforcement Directorate, the Income Tax Investigation Wing, the RBI's FEMA division, the Registrar of Chits, the Registrar of Companies, and Central GST Intelligence.

Although GST officials detected tax evasion, there were improper interventions and lapses by the Intelligence Officer in Kanhangad, the Deputy Commissioner at the Thiruvananthapuram Intelligence Headquarters, the Deputy Commissioner (Intelligence) in Kasaragod, and the Joint Commissioner (Intelligence) in Kozhikode. Disciplinary action has been recommended against them.

The report submitted to the Chief Minister calls for an inquiry by the Inspector General (IG) of Registration and departmental action within the GST wing.

Transactions via six secret accounts

1. The SIT's discovery of six accounts—which were neither linked to the sponsor's company nor mentioned in official records—proved crucial.

2. Of the Rs 549.22 crore mobilised, Rs 212.75 crore was obtained as loans from non-banking financial companies (NBFCs).

3. The source of the remaining Rs 336.47 crore was not disclosed; however, Rs 102.47 crore was declared as company revenue in tax filings. Consequently, the remaining Rs 234.31 crore was classified as illicit money (black money).

4. Funds from all six suspicious accounts were routed to the sponsor's main account. Based on this finding, the SIT concluded that a fraud amounting to ₹549.22 crore had taken place.

Tax loss of Rs 25.78 crore

1. Rs 22.68 crore in GST on the Rs 126.03 crore ($14.5 million) remitted to the Argentine Football Association via 'Tour Prod Enter', the collection agent.

2. Rs 35.15 lakh in GST on five foreign transactions totalling Rs 1.89 crore.

3. Rs 2.75 crore misappropriated from the government under the input tax category by inflating stadium renovation expenses. The total tax loss to the state government amounts to Rs 25.78 crore.