Share sale of KRSPL Cricket

ED questions Shah Rukh Khan

Actor Shah Rukh Khan. Photo: Aruanangsu Roy Chowdhury  

Actor Shah Rukh Khan appeared before the Enforcement Directorate (ED) on Tuesday, in connection with an alleged Foreign Exchange Management Act (FEMA) violation case.

The agency had issued a summons to Mr. Khan in connection with the case earlier this year. On Tuesday, ED officials questioned him for around three hours, after which he left, sources said.

The ED is investigating a case dating back to 2008, pertaining to the transfer of shares of Mr. Khan’s Indian Premier League (IPL) team Kolkata Knight Riders.

Knight Rider Sports Pvt Ltd (KRSPL) is owned by Red Chillies, a company jointly owned by Mr. Khan and actor Juhi Chawla. In 2008, 50 lakh shares of KRSPL were allegedly transferred to Sea Island Investment Ltd (SIIL), which is owned by Ms. Chawla’s husband Jay Mehta and is based in Mauritius.

Mr. Khan allegedly transferred the shares at a much lower price than is permitted in a share exchange to an overseas company under FEMA rules. FEMA dictates that shares issued to a person based overseas should not be issued at a price lower than the one fixed by the Securities and Exchange Board of India (SEBI).

The matter came under the ED’s scanner in 2010-2011 and an audit conducted by the ED with the help of an independent auditing firm indicated that the shares were allegedly transferred at a rate at least eight times lower than the permissible rate.

Mr. Khan was questioned once before in the matter in 2011 and the agency later issued one more summons to him. However, he sought more time to appear before the agency, citing film schedules, and in late October this year, a third summons was issued.

Officials said that on Tuesday, Mr. Khan provided some documents related to the transfer of shares.

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Printable version | Dec 1, 2020 5:32:58 AM | https://www.thehindu.com/sport/cricket/ed-questions-shah-rukh-khan/article7866123.ece

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