‘Looking forward to returning to India’: Lalit Modi after Tribunal clears him in FEMA violation case

Speaking to The Indian Express, Lalit Modi’s counsel Mahmood Abdi said, “In this regard, there is no other case pending against Mr Modi.”

The dispute goes back to 2009, when the IPL’s second season was shifted to South Africa after its schedule clashed with the general elections and security concerns made it difficult to hold both simultaneously.

Conducting the tournament overseas required the BCCI to remit substantial sums to Cricket South Africa (CSA), vendors and other entities for venues, logistics and operational expenses.

The ED later alleged that several of these remittances violated FEMA. Its central case was that they were “capital account transactions” requiring prior RBI approval, rather than “current account transactions”, which are ordinarily permitted.

It issued 12 show-cause notices in 2011 before passing an order in May 2018, imposing penalties on the BCCI, Lalit Modi, former BCCI office-bearers N Srinivasan and M P Pandove, State Bank of India and its former chief manager A K Nazeer Khan.

Lalit Modi, who had been suspended by the BCCI in 2010 and later banned for life in separate disciplinary proceedings, challenged the order along with the other appellants before the SAFEMA Tribunal.

Granting relief to Lalit Modi, the Tribunal held that the ED failed to show that he was the person responsible for the BCCI’s compliance with FEMA. It noted that while Modi was IPL chairman and BCCI vice-president, the responsibility for ensuring compliance with foreign exchange rules rested with the board’s office-bearers, particularly the secretary and the treasurer.

Finding no material linking him to the alleged contraventions, it held that “he was not in charge of the affairs and otherwise he has been framed in the case without any material showing his responsibility. The penalty imposed on Shri Lalit Kumar Modi is wholly erroneous is thus interfered.”

The Tribunal also described him as “the chief architect behind the organisation and conduct of IPL-2 in South Africa,” observing that it was “an admitted position that the very concept of the Indian Premier League was the brainchild of the Appellant”.

The Tribunal, however, took a different view of former BCCI secretary N Srinivasan and treasurer M P Pandove, holding that “a case is made out against them being the in-charge of the affairs”.

It reduced their “excessive” penalties from Rs 1 crore to Rs 10 lakh in Srinivasan’s case and from Rs 50 lakh to Rs 5 lakh in Pandove’s but did not clear them. The State Bank of India and its former chief manager A K Nazeer Khan, meanwhile, were let off after the Tribunal found the remittances had been processed based on the prescribed documents.

The BCCI got only partial relief. While the Tribunal upheld a Rs 4 crore penalty over remittances that exceeded the amount recorded in the Board’s books, it reduced another penalty, from Rs 4 crore to Rs 1 crore for the delayed repatriation of ticket sale proceeds, noting that the money was eventually brought back to India.