Bollywood actor Shah Rukh Khan, who is also the owner of Kolkata Knight Riders, was grilled by the Enforcement Directorate on Wednesday. This grilling session was in connection with the ongoing investigation into financial irregularities in the Indian Premier League.
The Enforcement Directorate recorded Shah Rukh Khan's statement in a matter of alleged irregularities in the sale of shares of Knight Riders Sports Pvt Ltd (KRSPL) to a Mauritius-based company. “We recorded Khan’s statement on Tuesday in connection with the violation of Foreign Exchange Management Act,” ED sources said.
According to allegations, five million shares of KRSPL were undervalued when they were sold to Jay Mehta's Mauritius-based company, Sea Islands Investments Ltd, in 2008.
Now, Directorate is probing allegations that shares sold to the Jay Mehta-owned Sea Island Investments were undervalued by eight to nine times.
At the time of incorporation in 2008, Red Chillies had 9,900 shares of KRSPL. The valuation report, made by ED’s external agency last year, said that when the equity shares of KRSPL were issued to Sea Island Investments, the fair value per equity share of KRSPL should have been between Rs 70-86.
However, the shares were issued at a value of Rs 10 each. According to the Foreign Exchange Management Act (FEMA), the price of shares issued to persons residing outside India should not be lower than the price worked out under the guidelines set by stock market regulator SEBI in case of a listed company, or on the basis of fair valuation of shares by a chartered accountant as per guidelines of the erstwhile Controller of Capital Issues (CCI). Officials said that Khan cooperated with them and has provided them with some documents related to the transfer of shares.
Shah Rukh Khan had faced ED in 2011 too, when he was questioned about alleged foreign exchange violation of around Rs 100 crore.
It was in May 2015, the Enforcement Directorate had served a notice to the team, but SRK didn't pay heed and failed to be present in front of the agency.
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