ED issues show-cause notice to SRK, Juhi

Claims actors caused loss of forex to tune of Rs 73.6 crore

ED issues show-cause notice to SRK, Juhi

The Enforcement Directorate on Friday issued show-cause notices to actor Shah Rukh Khan, his wife Gauri Khan and actor Juhi Chawla for violation of FEMA provisions to the tune of Rs 73.6 crore in the Indian Premier League.

The notice deals with the transfer of a portion of the shares of Knight Riders Sports Pvt Ltd (KRSPL), which owns the IPL team Kolkata Knight Riders, to a Mauritius firm,  causing a loss of foreign exchange to the extent of Rs 73.6 crore.

The Red Chillies Enterprises Pvt Ltd (RCEPL), owned by Khan and Gauri, had formed the KRSPL to acquire the IPL franchise rights of Kolkata Knight Riders.

According to ED sources, the entire shareholdings of the KRSPL were with Red Chillies Enterprises.

After the success of the IPL, it said that around two crore additional shares were issued by KRSPL, of which 50 lakh shares were issued to The Sea Island Investment Ltd (TSIIL), Mauritius, and 40 lakh shares were issued to Juhi.

“These shares were allotted at a par value of Rs 10, whereas the actual value of these shares was much higher. Juhi Chawla subsequently sold her 40 lakh shares to TSIIL, Mauritius,
at the par value of Rs 10 only.

Thus, foreign-based company TSIIL was issued 90 lakh shares at par value, while the actual cost of share at the time of issue ranged between Rs 86 to Rs 99 per share,” the ED said.

This has resulted in the loss of foreign exchange to the extent of Rs 73.6 crore, it
concluded.

Khan, Gauri and Juhi have 15 days to make their submissions, the agency said.

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