ED issues notice to Shah Rukh Khan, wife Gauri Khan, Juhi Chawla

Juhi Chawla

The Enforcement Directorate (ED) on Friday issued show-cause notice to Knight Riders Sports Pvt. Ltd (KRSPL), its director Gauri Khan, her husband Shah Rukh Khan and actor Juhi Chawla under the Foreign Exchange Management Act (FEMA).

The agency has alleged a loss of Rs..73.6 crore in foreign exchange.

The notice was issued for alleged contravention of the Foreign Exchange Management (Transfer or issue of Security by a Person Resident Outside India) Regulations, 2000.

According to the ED, Red Chillies Enterprises Pvt. Ltd., a wholly owned subsidiary of Red Chillies International Ltd. (Bermuda), is the company owned by Mr. Khan and his wife.

“In 2008, M/s. Red Chillies Enterprises formed a special purpose vehicle, named Knight Riders Sports Ltd., for the purpose of acquiring IPL franchise rights of the team named Kolkata Knight Riders. Initially, the entire shareholding of Kolkata Knight Riders was with Red Chillies Enterprises and Ms. Khan,” said the ED.

After the success in IPL series, about two crore additional shares were allegedly issued by KRSPL, of which 50 lakh shares were issued to The Sea Island Investment Ltd-Mauritius (TSIIL) and 40 lakh shares to Ms. Chawla, said the agency.

These shares were allotted at a par value of Rs.10 while the actual value of these shares was much higher, alleged the Directorate. Ms. Chawla, subsequently, sold her 40 lakh shares to TSIIL-Mauritius at par value of Rs.10.

“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 ranged between Rs.86 and Rs.99 per share. This has resulted in a loss of foreign exchange to the extent of Rs.73.6 crore. The noticees have been given time of 15 days to make their submissions,” said the Directorate.

Source – THE HINDU

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