Shahrukh Khan gets ED notice in FEMA case
The Enforcement Directorate issued notice to actor Sharukh Khan in connection with a foreign exchange violation case. It was alleged that the shares linked to his Kolkata Knight Riders IPL team were undervalued.
In March this year the ED had sent a show-cause notice to the actor, his wife Gauri Khan, actress Juhi Chawla. 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 Rs 10 whereas the actual value of these shares was much higher.
The ED alleges that Juhi Chawla sold her 40 lakhs shares to M/s. TSIIL, Mauritius at the par value of Rs 10. 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 resulted in loss of foreign exchange to the extent of Rs 73.6 crore the government, the ED had claimed.
The ED expects Khan to either respond and present his version in person or through his advocate.