A show cause notice issued by ED to Shah Rukh Khan, Juhi Chawla

On Friday, the Enforcement Directorate issued a show cause notice to Kolkata Knight Riders promoters Shah Rukh Khan, wife Gauri Khan and actress Juhi Chawla under the Foreign Exchange Management Act (FEMA). (Also Read: This Turkish ice cream vendor has caught the fancy of Shah Rukh Khan. Here’s why…)

Reportedly, the IPL team has sold their shares to a Mauritius-based company in 2009 which incurred a loss of Rs 73.6 crore to the Goverment. They sold the shares to The Sea Island Investment Ltd which is owned by Juhi Chawla’s husband Jay Mehta.

As per the ED, Red Chillies Enterprises Pvt. Ltd., which is a wholly owned subsidiary of Red Chillies International Ltd, Bermuda, is owned by SRK and his wife Gauri.

Said the ED, “In 2008, M/s. Red Chillies Enterprises formed a special purpose vehicle, named Knight Riders Sports Ltd., for the purpose of acquiring IPL franchise rights of the team named Kolkata Knight Riders. Initially, the entire shareholding of Kolkata Knight Riders was with Red Chillies Enterprises and Ms. Khan.”

After proper investigations, the agency registered a complaint against IPL co-owners and they will be mostly called for a hearing in the next two weeks. The penalty amount will be thrice the amount of loss. In the past, SRK has been summoned twice by the ED.

The agency states that about Rs 50 lakh were issue to the Mauritius-based company and 40 lakh shares to Ms Chawla. The shares were allotted at a pr value of Rs 10. Added the ED, “Thus, foreign-based company TSIIL was issued 90 lakh shares at par value, while the actual cost of share at the time of issue/sale ranged between Rs.86 and Rs.99 per share. This has resulted in a loss of foreign exchange to the extent of Rs.73.6 crore. The noticees have been given time of 15 days to make their submissions.”

SRK and Juhi Chawla are yet to record their statements on this notice.

Prajakta Ajgaonkar

Passionate about writing, and a Bollywood lover, she is all that is sweet and endearing! She desires to put her best foot forward in everything that she does and loves to help anyone who’s in need.