Earlier in March this year, the ED had sent a show-cause notice to Khan, his wife Gauri, actress Juhi Chawla, and others for the alleged loss
The Enforcement Directorate (ED) has issued a notice to Bollywood actor Shahrukh Khan directing him to appear personally before the agency in a case of alleged loss of Rs 73.6 crore foreign exchange in a FEMA case related to the T20 cricket league IPL. The agency issued the notice to Khan, who owns an Indian Premier League (IPL) team of Kolkata Knight Riders (KKR), as per the agency "adjudication proceeding" against him and others in violation of the Foreign Exchange Management Act (FEMA). He has been asked to "personally appear" before the agency on August 23.
Earlier in March this year, the ED had sent a show-cause notice to Khan, his wife Gauri, actress Juhi Chawla, and others for the alleged loss. Khan and others have also been questioned by the agency in this case and the actor's statement was also recorded under FEMA provisions.
Khan had floated a company Knight Riders Sports Private Limited (KRSPL), which owned the cricket team Kolkata Knight Riders (KKR). The agency is probing the sale of shares of KRSPL to a Mauritius-based firm at a cost lower than their actual value, eventually incurring a loss of foreign exchange to the tune of Rs 73.6 crore.
During the investigation, the agency found that Khan owned a company Red Chillies Enterprises Private Limited, which is a wholly-owned subsidiary of Red Chillies International Limited based in Bermuda. It is co-owned by Gauri. In 2008, Red Chillies Enterprises Private Limited formed a subsidiary company Knight Riders Sports Ltd in a bid to acquire IPL franchise rights of the cricket team KKR.
During the probe, the agency found that initially, the entire share holding of KRSPL was with Red Chillies Enterprises and Gauri. After the success of IPL, about 2 crore additional shares were issued by KRSPL, of which 50 lakh shares were issued to The Sea Island Investment Ltd (TSIIL), Mauritius, and 40 lakh shares were issued to Chawla.
"Strangely these shares were allotted at a par value of Rs 10, whereas the actual value of these shares was much higher," said the ED officer, adding that Chawla subsequently sold her 40 lakh shares to TSIIL at the par value of Rs 10 only.
"So, TSIIL got 90 lakh shares at par value of Rs 10 while the actual cost of share at the time of sale was between Rs 86 Rs 99 per share. It resulted in the loss of foreign exchange to the extent of Rs 73.6 crore," the officer added.
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