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Shah Rukh, wife among others summoned in Dh42m case

PTI/Mumbai
Filed on July 22, 2017 | Last updated on July 22, 2017 at 05.40 am
Shah Rukh, wife among others summoned in Dh42m case

(PTI file)

The actor has been asked to be present before the adjudicating authority on August 23

The ED (Enforcement Directorate) has issued notices for adjudication to Bollywood actor Shah Rukh Khan and some others in connection with a FEMA (Foreign Exchange Management Act) case for alleged loss of Rs73.6 crore (approximately Dh42 million) foreign exchange related to the IPL T-20 cricket league, officials said.

The actor has been asked to be present before the adjudicating authority of the case in Mumbai on August 23, they said.

The authority, in this case, is a special director-rank officer of the agency.

The accused are issued notices by the authority so that they can participate in the legal hearing and subsequent final decision of the case which, if proven guilty, can lead to up to three times of the penalty on the actual amount of loss.

They said the notice has also been issued against few others involved in the case, where the Enforcement Directorate had issued a show cause notice under the Foreign Exchange Management Act in March.

The case pertains to the show cause notice where the central probe agency had issued notices to Khan, his wife Gauri, actor-friend Juhi Chawla and Knight Riders Sports Private Limited (KRSPL), which owns the Indian Premier League (IPL) team of Kolkata Knight Riders (KKR).

The show cause notice had been issued for the sale of some shares of KRSPL to a Mauritius-based firm at a cost lower than their "actual value", resulting in loss of foreign exchange to the extent of Rs 73.6 crore.

The agency had stated that the notice has been issued for "contravention of provisions of the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000 made under the Foreign Exchange Management Act".

While Gauri is a director of KRSPL, Khan and Chawla are the owners of the IPL team KKR.

The case pertains to 2008-09 when the ED first began investigation against the IPL franchise and its owners.

Khan and others have been questioned by the ED multiple times in this case and the actor's statement was also recorded under FEMA provisions.

A show cause notice under FEMA laws is issued when the investigation gets completed and following this the adjudication process begins.

Khan's company Red Chillies Enterprises Private Limited (RCEPL), the agency had said, is a wholly-owned subsidiary of Red Chillies International Limited based overseas in Bermuda and is co-owned by Gauri.

"In 2008 Red Chillies Enterprises Private Limited formed a special purpose vehicle namely M/s Knight Riders Sports Ltd for the purpose of acquiring IPL franchise rights of the cricket team named Kolkata Knight Riders.

"Initially, the entire share holding of Ms Kolkata Knight Riders Private Limited was with Red Chillies Enterprises and Gauri. After the success of IPL, about two crore additional shares were issued by KRSPL out of which 50 lakh shares were issued to The Sea Island Investment Ltd (TSIIL), Mauritius and 40 lakh shares were issued to Chawla.

"These shares were allotted at a par value of Rs10 whereas the actual value of these shares was much higher," it had said.

The ED said its investigation showed that Chawla subsequently sold her 40 lakh shares to TSIIL, Mauritius at the par value of Rs10 only.

"Thus, foreign based company TSIIL was issued 90 lakh shares at par value while the actual cost of share at the time of issue/sale was ranging between Rs86-INR 99 per share. This has resulted in loss of foreign exchange to the extent of Rs73.6 crore," the agency had said.





 
 
 
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