Naveen Uraon
THE Enforcement Directorate (ED) has recorded the statement on Tuesday of Bollywood actor Shah Rukh Khan the co-owner of the Kolkata Knight Riders (KKR), in connection with the violation of Foreign Exchange Management Act (FEMA). Khan had faced ED once in 2011 when he was questioned about alleged foreign exchange violation of around Rs 100 crore.
He was reportedly grilled by the ED for three hours. The actor has been summoned twice since May. Officials said that Shahrukh Khan cooperated with them and has provided them with some documents related to the transfer of shares.
The ED is investigating two separate sales of shares by Kolkata Knight Riders in 2009 and 2010 to Sea Island Investment Ltd, a Mauritius-based company. The agency alleges that the shares are undervalued.
According to media reports, the case, dating back to 2008-09, pertains to the share sale of KRSPL, owned by Khan’s Red Chillies along with Juhi Chawla and her husband, to a Mauritius-based company owned by Chawla’s husband Jay Mehta.ED 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).