Manoj Badale, Suresh Chellaram, others asked to shell out Rs. 50 crore
Rajasthan Royals and its foreign investors have been slapped a penalty of nearly Rs. 100 crore by the Enforcement Directorate (ED) for contravention of various sections of the Foreign Exchange Management Act (FEMA). Notices were issued to the Indian Premier League (IPL) franchise, Jaipur IPL Cricket Private Limited (JIPL); EM Sporting Holding of Mauritius; and M/S ND Investments of the U.K. They have been asked to pay the penalty within 45 days.
JIPL, which owns Rajasthan Royals, has been asked to pay nearly Rs. 50 crore. Several severe irregularities were found in the foreign investment of the group, sources in the ED said.
Directors of the JIPL include Manoj Badale and Suresh Chellaram. Mr. Badale is also the co-owner of Rajasthan Royals.
“JIPL and its directors have been asked to pay a penalty of around Rs. 50 crore by the adjudicating authority. The EM Sporting Holding of Mauritius and its directors have been slapped with a penalty of around Rs. 34 crore. M/S ND Investments of the U.K. and its directors have been asked to pay around Rs. 14.5 crore,” an official source said.
In April 2011, the ED had issued show-cause notice to JIPL after coming across “flagrant contravention of FEMA.”
“The investment was made much prior to the incorporation of JIPL, funds had been remitted in an irregular manner and shares were sought to be issued in contravention of FEMA,” an official said.
ED investigation revealed that the foreign investments in the group were “in contravention of Section 6 of FEMA read with FEM [Transfer or issue of Security by a person resident outside India] Regulations and FEM [Permissible Capital Account Transactions] Regulations and Section 3(b) of FEMA, 1999.”