Enforcement Directorate summons Shah Rukh, Gauri Khan for adjudication proceedings in FEMA violation case

Earlier in March, the ED had issued a show cause notice to Knight Riders Sports Pvt Ltd that owns the KKR IPL team, its director Gauri, Shah Rukh and Juhi Chawla.

By: Express Web Desk | New Delhi | Updated: July 20, 2017 8:09 pm
shah rukh khan, shah rukh FEMA, gauri khan, enforcement directorate, shah rukh summoned, shah rukh KKR, KKR fema violation, IPL FEMA case Actor Shah Rukh Khan and wife Gauri Khan

The Enforcement Directorate (ED) started adjudication proceedings against the Kolkata Knight Riders (KKR) in connection with alleged loss of Rs 73.6 crore foreign exchange in a FEMA case related to the T-20 cricket league IPL. The adjudicating authority of the agency sent notices to actor Shah Rukh Khan, his wife Gauri (director of KKR), actor-friend Juhi Chawla to participate in the adjudication proceedings scheduled on August 23.

Earlier in March, the ED had issued a show cause notice to Knight Riders Sports Pvt Ltd that owns the KKR IPL team, Gauri, Shah Rukh and Juhi Chawla.

The 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 said 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.

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.

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