ED’s foreign exchange violations case against BCCI remains in limbo
The Enforcement Directorate (ED) is pushing for Vijay Mallya’s extradition as it investigates the fallen liquor-and-airline baron for defaulting bank loans to the tune of Rs 9000 crore and foreign exchange rule violations.Updated: May 04, 2016 14:09 IST
The Enforcement Directorate (ED) is pushing for Vijay Mallya’s extradition as it investigates the fallen liquor-and-airline baron for defaulting bank loans to the tune of Rs 9000 crore and foreign exchange rule violations.
While there is massive interest in the case, it has also renewed focus into the high-profile cases of the top agency that have dragged on for years.
For instance, the case involving the Board of Control for Cricket in India, registered way back in 2009, is yet to reach closure.
The directorate had launched an investigation against the BCCI and its top officials for alleged foreign exchange violations to the tune of Rs 2148 crore over the sports body “illegally routing” foreign exchange worth crores of rupees after shifting the Indian Premier League to South Africa that year due to elections.
The focus was on transfer of money without RBI permission. That included a payment of Rs 88.48 crore made by the BCCI as consultancy fees to the International Management Group (IMG) for organising the league.
However, the ED denied there was any undue delay and that some cases where yet to be adjudicated on. “There is no update yet as adjudications are on. The ED special director is the competent authority to adjudicate those cases. Investigation in most of the cases against BCCI/IPL have been completed,” Satyabrata Kumar, ED joint director, Mumbai zonal office, told HT.
The ED had issued 24 show-cause notices during 2011-2012 for FEMA violations, against then BCCI secretary N Srinivasan, then IPL commissioner Lalit Modi and Shashank Manohar, who was then serving his initial term as Board president.
It had also served notices to then BCCI treasurer, MP Pandove, then Chief Administrative Officer, Ratnakar Shetty, and Prasanna Kannan, who was the employee of the India Cements, owned by Srinivasan.
Of these, only four notices have been adjudicated on and a penalty of Rs 98.35 crore imposed. “We have filed complaints for FEMA violation. The violators are being adjudicated by the adjudicating authority. I don’t remember the numbers, but we have completed investigation in a sizeable number of cases,” Kumar added.
A senior member of the BCCI’s legal team denied there was any wrongdoing. “There are absolutely no violations of the substantive laws by BCCI. There is not even a loss of one rupee to the exchequer. It is not ED’s case that the country’s foreign exchange was affected. There was not even a suggestion that money sent out of the country was for conversion type of transaction (laundering) like that.”
The BCCI has argued that the total foreign exchange covered by the ED notices amounted to only R283 crore and that adding up charges of contravention under multiple FEMA provisions had led to a higher figure. “There is no update about FEMA cases. We haven’t heard from ED for almost a year,” IPL’s Chief Operating Officer, Ratnakar Shetty, told HT on Monday.
In August 2013, the Bombay HC had quashed an ED notice directing Manohar to appear before it for alleged FEMA violation after his lawyers submitted to the court that he had advised the IPL Governing Council to take RBI permission before opening the offshore bank account.