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Shah Rukh Khan summoned by ED in IPL FEMA violation case

The Enforcement Directorate (ED) issued notice to Bollywood actor Shah Rukh Khan and others in IPL FEMA case which alleges violation in selling around five million Knight Riders Sports Pvt Ltd (KRSPL) shares at an undervalued rate.

india Updated: Jul 20, 2017 23:36 IST
Pratik Salunke
Pratik Salunke
Mumbai, Hindustan Times
IPL FEMA violation case,Shah Rukh Khan,Kolkata Knight Riders
Shah Rukh Khan attends a promotional event for Jab Harry Met Sejal.(AFP)

The Enforcement Directorate (ED) on Thursday issued notice to actor Shah Rukh Khan, asking him to appear on August 23 in a foreign exchange violation adjudication case with alleged undervaluation of shares linked with his Kolkata Knight Riders team in the Indian Premier League (IPL).

ED sources said that the notice has been sent to the actor. Khan can present his version personally or through his lawyer before the special director of the ED.

“We will hear what he has to say,” confirmed a senior ED official.

Shah Rukh Khan, Anushka Sharma and director Imtiaz Ali during the promotion of Jab Harry Met Sejal. (PTI)

Earlier in March this year, ED had sent a show-cause notice to the actor, his wife Gauri Khan, actress Juhi Chawla in this regard.

According to the ED, M/s. Red Chillies Enterprises Pvt. Ltd (RCEPL) formed a special purpose vehicle M/s. Knight Riders Sports Pvt. Ltd. (KRSPL) in 2008 for the purpose of acquiring IPL franchise rights of the cricket team named Kolkatta Knight Riders.

RCEPL, a wholly owned subsidiary of M/s. Red Chillies International Ltd., Bermuda, is a company owned by SRK and Gauri Khan.

Initially, the entire shareholding of KRSPL was with Red Chillies and Gauri Khan. After the success of IPL, about two crore additional shares were issued by KRSPL out of which 50 lakh shares were issued to The Sea Island Investment Ltd. (TSIIL), Mauritius and 40 lakh shares were issued to Juhi Chawla. These shares were allotted at a par value of Rs10 whereas the actual value of these shares was much higher.

According to ED, Juhi Chawla subsequently sold her 40 lakhs shares to M/s. TSIIL, Mauritius at the par value of Rs10. Thus, M/s. TSIIL was issued 90 lakhs shares at par value while the actual cost of share at the time of issue/sale was ranging between Rs 86 to Rs 99 per share. This has resulted in loss of foreign exchange to the extent of Rs 73.6 crore the government, the ED had claimed.

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First Published: Jul 20, 2017 19:38 IST