New Delhi, 5 April

The Enforcement Directorate on 5 April said it seized Rs 1.5 crore in cash after conducting searches at the premises of a chit fund company owned by Gokulam Gopalan, one of the producers of Malayalam film 'L2: Empuraan.'

The ED said the action was initiated on 4 April under the Foreign Exchange Management Act (FEMA) at the residential and business premises of Sri Gokulam Chits and Finance Company Pvt Ltd, located at one location in Kozhikode, Kerala and two locations in Chennai, Tamil Nadu.

It said Rs 1.50 crore in cash and incriminating documents showing violation of FEMA were seized during the searches. There was no immediate response from Gopalan or his company on the ED's allegations.

The ED raids come against the backdrop of the recent controversy over 'L2: Empuraan', the second installment of the 'Lucifer' trilogy. The film has been the subject of heated debate over its criticism of right-wing politics and cryptic mention of the 2002 Gujarat riots.

The other producers of the film are Antony Perumbavoor and Subaskaran, who are making the film under the banners of Ashirvad Cinema and Lyca Productions respectively. According to Perumbavoor, more than two minutes of scenes were deleted from the film following the controversy.

The ED said it had received specific intelligence that Sree Gokulam Chits and Finance Company Private Limited was collecting subscriptions for chit funds from persons residing outside India without the permission of the competent authority.

The agency claimed that "subscription amounts were being collected in cash from these individuals in violation of regulations framed by the Reserve Bank of India (RBI)." It further said that "it has violated Regulation 4(b) of the Foreign Exchange Management (Permissible Capital Account Transactions) Regulations, 2000 read with Circular No. 107 dated June 11, 2015 issued by the RBI."

The company collected Rs 3,71.80 crore in cash from persons resident outside India and Rs 220.74 crore through cheques from the same category of persons. "The huge amount was paid in cash to persons resident outside India in violation of Section 3(b) of FEMA.

'L2: Empuraan' is directed by actor Prithviraj Sukumaran, who is also acting in the film along with Malayalam superstar Mohanlal.