KKR shares sold to Mehta on basis of friendship, Shah Rukh tells ED

  • HT Correspondent, Hindustan Times, Mumbai
  • Updated: Nov 12, 2015 17:19 IST
Shah Rukh Khan was questioned by Enforcement directorate over alleged involvement in FEMA violations in the Indian Premier League. (File Photo)

Actor Shah Rukh Khan told the Enforcement Directorate during questioning over alleged foreign exchange violations in the Indian Premier League (IPL) that shares in Kolkata Knight Riders were sold to team co-owner Jay Mehta on the basis of their friendship, agency sources said.

Khan is being probed in connection with alleged Foreign Exchange Management Act (FEMA) violations in the sale of around five million shares of Knight Riders Sports Pvt Ltd (KRSPL), a franchise owned by his company Red Chillies Entertainment, to a Mauritius-based company owned by Mehta.

“The question was about the under-valuation of shares. Prima facie it appears that the shares were undervalued,” said an ED source.

“He is saying that it was between friends. The actor stated that he knows Juhi Chawla and her husband Mehta for a long time and the shares were given in friendship and that valuation is not that material.”

“We are examining his replies following which further course of action will be decided. IPL was a good brand name by that time and it was very successful. Valuation should have been much higher.”

The central agency is probing allegations that shares sold to the Mehta-owned Sea Island Investments were allegedly undervalued by eight to nine times by Khan’s business end.

Read | IPL probe: Shah Rukh Khan questioned by ED on FEMA violations

In 2008, Red Chillies -- which owns KRSPL -- had 9,900 shares. A valuation report, made by the ED’s external agency last year, said the value of the shares sold to Mehta’s Mauritius-based company should have been between Rs 70-86. However, the shares were issued at a price of Rs 10 each.

A day after Khan was questioned, the Congress on Thursday asked if he was was being targeted because he spoke up on the issue of intolerance in the country.

“A noted film star like Shah Rukh Khan is grilled for four hours... Whether he is facing wrath for speaking out or whether something wrong has been done by him,” chief spokesperson of Congress, Randeep Surjewala, said.

(With agency inputs)

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