ED summons Shah Rukh Khan over KKR shares row
The shares were sold to Jay Mehta-owned Sea Island Investment
New Delhi: The Enforcement Directorate (ED) has again issued summons to Shah Rukh Khan in connection with the sale of shares of his Indian Premier League franchise Knight Riders Sports Pvt Ltd (KRSPL).
The franchise is owned by Shahrukh's company Red Chillies Entertainment, which is in partnership with actress Juhi Chawla and her husband Jay Mehta from the Mehta Group.
The case is from 2008, when KRSPL sold shares to Mehta- owned Sea Island Investment for 8-9 times below their original value.
In May this year, Kolkata Knight Riders (KKR) – the defending champions of the eighth edition of the Indian Premier League (IPL) – ran into rough waters as its co-owner Shah Rukh Khan was summoned by the ED for undervaluation of shares of the franchise.
According to reports, the ED then discovered shocking audit findings that indicated forex violation of Rs 100 crore.
The audit conducted for the ED concluded that the transfer of shares between Knight Riders Sports Private Limited (KRSPL) and Sea Island Investment (SIIL) – owned by Jay Mehta – was undervalued by the respective bodies.
As per Foreign Exchange Management Act (FEMA) guidelines, the price of shares issued to individuals residing outside India should not be lower than the price shown under the regulations set by stock market regulator SEBI.
The ED deduced that the value of shares owned by SIIL was inconsistent with the price guidelines.
KKR was asked to explain the situation before March-end which was the deadline.