New Delhi, Apr 5 (PTI) The Enforcement Directorate on Saturday said it seized Rs 1.5 crore in cash after searching the premises of a chit fund company owned by Gokulam Gopalan, one of the producers of the Malayalam movie "L2: Empuraan", in connection with foreign exchange law violations.

The federal agency said in a statement that the searches that were launched on Friday ended on Saturday.

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

The searches led to the seizure of Rs 1.50 crore in cash and "incriminating" documents in "violation" of FEMA, it said.

There was no immediate response from Gopalan or his company on the ED allegations.

The ED searches come in the backdrop of the recent controversy surrounding "L2: Empuraan", the second instalment of the "Lucifer" trilogy.

Touted as one of the costliest Malayalam cinema productions, "L2: Empuraan" was released on March 27 and soon became a topic of hot debate over its critique of right-wing politics and covert mention of the 2002 Gujarat riots.

The other producers of the film are Antony Perumbavoor and Subaskaran under the banner of Aashirvad Cinemas and Lyca Productions, respectively.

According to Perumbavoor, a little over two minutes of scenes were deleted from the movie following the controversy.

The ED said it gathered "specific" intelligence that Sree Gokulam Chits and Finance Co. Pvt. Ltd., without due permission from the competent authority, was collecting subscription to chit funds from persons residing outside India.

"The subscription amounts from these persons were being collected in cash in violation of the regulations framed by the Reserve Bank of India (RBI).

"This led to the violation of Regulation 4(b) of Foreign Exchange Management (Permissible Capital Account Transactions) Regulations, 2000 read with circular No. 107 dated June 11, 2015, issued by RBI," the agency claimed.

The company collected Rs 3,71.80 crore in cash from persons residing outside India and Rs 220.74 crore through cheques from the same category of people.

"Significant amounts were paid in cash to the persons resident (residing) outside India in violation of Section 3(b) of FEMA," it said.

"L2: Empuraan" is directed by actor Prithviraj Sukumaran, who also features in the film alongside Malayalam superstar Mohanlal. PTI NES DIV DIV

Foreign exchange violations: enforcement action against chit fund for unauthorized cross border subscriptions and cash transactions. Authorities searched residential and business premises and seized cash and documents after intelligence indicated the chit fund collected subscriptions from persons residing outside India without required permission, receiving significant amounts in cash and cheques and making cash payments to non residents in breach of Reserve Bank regulations and provisions of the Foreign Exchange Management Act.