ED slaps Rs 100 cr penalty on Royals
5 Feb 2013 1:46 AM GMT
The Enforcement Directorate (ED) has slapped a penalty notice of approximately Rs 100 crore against Rajasthan Royals for allegedly violating foreign exchange laws in business operations.
ED, which issued the penalty notice after two years of investigations under the Foreign Exchange Management Act (FEMA), has sent out three separate notices to the IPL franchise totalling to Rs 98.5 crore plus some other similar notices earlier, sources said.
While a Rs 50 crore penalty has been slapped on Jaipur IPL Cricket Private Limited (JIPL) and its directors, owners of Rajasthan Royals, Rs 34 crore notice for evasion of forex duties has been issued against EM Sporting Holding, Mauritius and its directors.
A fresh notice of Rs 14.5 crore has been issued against Ms ND Investments, United Kingdom and its directors. All the three parties can appeal against this penalty order in the appellate authority of Foreign Exchange Management Act. The order requires the IPL team to pay up in 45 days.
Meanwhile, Rajasthan Royals officials said they will appeal against the order after discussing its contents with their lawyers. They refused to make any further statement.
The ED has been investigating financial and foreign exchange irregularities against all the IPL franchises for almost two years now and this is the first big order against any team. It comes just a day after auctions concluded in Chennai for the sixth edition of the glamorous cricket extravaganza.
The penalty order said the probe agency found that foreign investment in JIPL was made in ‘flagrant contravention of FEMA’ and the investment made in this regard was made ‘much prior to the incorporation of JIPL’.
The penalty was issued after investigations pointed out that the funds in the firm have been remitted in an irregular manner and shares were allegedly issued in violation of forex rules stipulated and framed by the RBI.
Bollywood star Shilpa Shetty and her businessman husband Raj Kundra also have stake in the franchise, which defied the odds to become the inaugural IPL champion. ‘We have our legal team looking into the same and will certainly appeal the exuberant penalty demanded (by the ED),’ said Raj Kundra.
ED, which issued the penalty notice after two years of investigations under the Foreign Exchange Management Act (FEMA), has sent out three separate notices to the IPL franchise totalling to Rs 98.5 crore plus some other similar notices earlier, sources said.
While a Rs 50 crore penalty has been slapped on Jaipur IPL Cricket Private Limited (JIPL) and its directors, owners of Rajasthan Royals, Rs 34 crore notice for evasion of forex duties has been issued against EM Sporting Holding, Mauritius and its directors.
A fresh notice of Rs 14.5 crore has been issued against Ms ND Investments, United Kingdom and its directors. All the three parties can appeal against this penalty order in the appellate authority of Foreign Exchange Management Act. The order requires the IPL team to pay up in 45 days.
Meanwhile, Rajasthan Royals officials said they will appeal against the order after discussing its contents with their lawyers. They refused to make any further statement.
The ED has been investigating financial and foreign exchange irregularities against all the IPL franchises for almost two years now and this is the first big order against any team. It comes just a day after auctions concluded in Chennai for the sixth edition of the glamorous cricket extravaganza.
The penalty order said the probe agency found that foreign investment in JIPL was made in ‘flagrant contravention of FEMA’ and the investment made in this regard was made ‘much prior to the incorporation of JIPL’.
The penalty was issued after investigations pointed out that the funds in the firm have been remitted in an irregular manner and shares were allegedly issued in violation of forex rules stipulated and framed by the RBI.
Bollywood star Shilpa Shetty and her businessman husband Raj Kundra also have stake in the franchise, which defied the odds to become the inaugural IPL champion. ‘We have our legal team looking into the same and will certainly appeal the exuberant penalty demanded (by the ED),’ said Raj Kundra.
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