The Enforcement Directorate has summoned Shah Rukh Khan for alleged foreign exchange violation linked to IPL(Indian Premier League).
The law enforcement agency sought his personal appearance on July 23, in connection with Kolkata Knight Riders FEMA case that involves sale of some shares of Knight Riders Sports Private Limited (KRSPL) to a Mauritius-based firm at a cost lower than their actual value, reported The Economic Times.
The sale has led to a loss of Rs 73.6 crore, the report adds.
Earlier in March this year, ED had issued notices to Kolkata Knight Riders owners Shah Rukh Khan, Gauri Khan and Juhu Chawla for violating FEMA guidelines.
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The notices were issued for contravention of provisions of Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000 made under Foreign Exchange Management Act (FEMA).
Under Rule 4(1) of Foreign Exchange Management (Adjudication Proceedings and Appeal Rules), 2000, these SCNs were issued to all.”.
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.
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A show-cause notice under FEMA laws is issued when the investigation gets completed.
Khan’s company Red Chillies Enterprises Private Limited (RCEPL), the agency said, is a wholly-owned subsidiary of Red Chillies International Limited based overseas in Burmuda 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 Rs 10 whereas the actual value of these shares was much higher,” it said.
The ED said its investigation showed that Chawla subsequently sold her 40 lakh shares to TSIIL, Mauritius at the par value of Rs 10 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 Rs 86-Rs 99 per share. This has resulted in loss of foreign exchange to the extent of Rs 73.6 crore,” the agency said.
The agency has given 15 days’ time to all the parties to reply to the notice after which the adjudication proceedings will begin in this case.
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(With PTI inputs)
