IPL probe: Shah Rukh Khan questioned by ED on FEMA violations
The Enforcement Directorate has questioned Bollywood actor Shah Rukh Khan in a matter of alleged irregularities in the sale of shares of Knight Riders Sports Pvt Ltd (KRSPL) to a Mauritius-based company.india Updated: Nov 11, 2015 21:19 IST
The Enforcement Directorate (ED), on Tuesday, recorded the statement of actor Shah Rukh Khan in connection with the alleged Foreign Exchange Management Act (FEMA) violations in the Indian Premier League (IPL). ED officials wanted further clarity in the whole case and hence questioned Khan for almost four hours, with officials adding he might be summoned again.
“We wanted more details pertaining to his earlier questioning and hence we had summoned him. We will weigh his statement with that of others in the case and accordingly decide on the next step,” said a high-ranking ED officer.
The case involves alleged violation is selling around five million Knight Riders Sports Pvt Ltd (KRSPL) shares at an undervalued rate to Jay Mehta, who is the co-owner of the Kolkata Knight Riders (KKR) team that plays in the IPL.
Khan was questioned on the method used to sell the shares to Mehta’s Mauritius-based company and the valuation attained to sell them. ED officials said while Khan was summoned at least twice before, Mehta and his actor wife Juhi Chawla’s statements have already been recorded before.
“We will now compare all three statements and will try to find discrepancies in them. We will also analyse the evidence that we have gathered in the case,” said the ED officer.
In 2008, Red Chillies, which owns KRSPL, had 9,900 shares. The valuation report, made by ED’s external agency last year stated the fair value of the shares sold to Mehta’s company should have been between Rs70-86. However, the shares were issued at price of Rs10 each.
According to provisions of the FEMA Act, the price of shares issued to people residing outside India should not be lower than the price worked out under the guidelines set by stock market regulator SEBI. In case of a listed company, it should be on the basis of fair valuation of shares by a chartered accountant, as per guidelines of the erstwhile Controller of Capital Issues (CCI).