E-Paper
ED summons Shah Rukh Khan for FEMA violation: What exactly did the actor do
Actor Shah Rukh Khan allegedly undervalued his shares of Knight Riders Sports Pvt. Ltd, which cost a forex loss of Rs 73.6 crore to the government.
The Enforcement Directorate (ED) has issued notices to actor Shah Rukh Khan and his wife, Gauri Khan, for alleged violations in Foreign Exchange Management Act (FEMA) to the tune of Rs 73.6 crore and asked them to appear before it on August 23.
Actor Juhi Chawla is also being probed in this case.
SRK had appeared before the law enforcement agency in 2011 and 2015 to record his statement. The ED had sent a show-cause notice to Khan, Gauri, and Chawla in March.
What is the forex case?
•SRK formed a start-up Knight Riders Sports Pvt. Ltd (KRSPL) in 2008 to acquire IPL franchise rights of cricket team Kolkata Knight Riders. He owned 10,000 shares 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, of which 50 lakh shares were issued to a Mauritius-based company owned by actor Juhi Chawla’s husband Jay Mehta, The Sea Island Investment Ltd (TSIIL), at Rs 10 per share, and 40 lakh shares were issued to Chawla. Khan owns 1.1 crore shares.
•Chawla later transferred her 40 lakh shares to TSIIL at Rs 10 per share as against a much higher market value. Thus, TSIIL owns 90 lakh shares at par value while the actual cost of share at the time of issue/sale was between Rs 86 and Rs 99 per share.
•The ED alleged that Khan undervalued his shares, which cost a forex loss of Rs 73.6 crore to the government.
