ED probing if Shah Rukh Khan company's share evaluated using 'wrong method'

NEW DELHI: The Enforcement Directorate, probing alleged violation of Foreign Exchange Management Act ( Fema) against actor Shah Rukh Khan, has claimed his startup Knight Riders Sports Pvt Ltd (KRSPL)’s share was evaluated using a “wrong method” of ‘present asset value’ (PAV) instead of ‘perceived earning capacity value’ (PECV), resulting in lesser value per share.

Shah Rukh was questioned by ED on November 10 soon after he spoke out against the ‘growing intolerance’. ED, however, said that it was Khan’s office which agreed to his availability on November 10, after which his statement was recorded. “He had earlier expressed his inability to appear before the agency on two previous occasions and we agreed to the date provided by his office,” said a top ED official. ED sleuths examined Shah Rukh on his decision to have the share evaluated using the PAV method, which, according to officials, is normally used during the liquidation of firms.

“For a startup like Shah Rukh’s, it was not correct to use PAV method, as it is assumed that the new company will not have assets on which the value of its share can be determined and it is bound to be priced less. In case of KRSPL, the value of each share was calculated to be around `10, while ED’s independent chartered accountant claimed the value of each share had to be around Rs 75,” explained an official.