Special director Enforcement Directorate (ED) conducting adjudication proceedings against Kolkata Knight Riders (KKR), has summoned the Indian Premier League (IPL) cricket team promoter Shah Rukh Khan and wife Gauri Khan for a personal hearing on August 23 before deciding on the show-cause issued for violating Foreign Exchange Management Act (FEMA) rules.   In March, the ED had issued a show-cause notice to KKR, Shah Rukh, Gauri and actor Juhi Chawla for violating FEMA rules. Special director ED Vineet Agarwal, who is also adjudication authority (quasi judicial authority), has initiated proceedings against the couple and KKR. There will be separate proceedings against Chawla.   In 2009, the KKR team promoters had allegedly sold their shares in the company to a Mauritius-based firm, Sea Island Investment Ltd (TSIIL) owned by Chawla’s industrialist husband Jay Mehta, at lower prices. The ED investigation had concluded that it had caused Rs 73.6 crore foreign exchange loss to the government.  According to the ED, initially, the Khans’ company, Red Chillies, owned the entire shareholding of KKR. After the success of IPL, 50 lakh shares were issued to TSIIL and 40 lakh shares to Chawla. These shares were allotted at a par value of Rs 10, though the actual value was much higher. Chawla subsequently sold her 40 lakh shares to her husband’s company at the same rate. Thus, TSIIL got 90 lakh shares of KKR at Rs 10 per share when the actual cost of each share ranged between Rs 86 and Rs 99.   The ED investigated the violations and money involved after examining the relevant documents on the basis of which it concluded the forex loss. The investigating agency then filed a complaint against Knight Riders Sports, Shah Rukh, Gauri and Chawla—who were managing the company—before the special director ED.  During investigation, Shah Rukh reportedly told the officials that in 2009, IPL and KKR were not profit-making ventures and accordingly, they had then evaluated the share prices. He denied any wrongdoing in the process and stated that valuation of shares increased later. But ED officials were not convinced with the explanation.   The Times  of  India : 21st. July,17


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