Rs 100 crore forex violation in transfer of shares between KRSPL and SIIL?

MUMBAI: The Enforcement Directorate, probing the foreign exchange violation in IPL-2 held in South Africa (2009), has stumbled upon "facts" that transfer of some shares between the Knight Riders Sports and Jay Mehta-owned Sea Island Investment was "undervalued" by the entities, which could be to the tune of Rs 100 crore.

"While probing the IPL case these facts came to the fore after which the we got the valuation done and found that the shares were transferred at undervalued price", an ED official said here today.

According to the official, the transfer of shares between KRSPL and SIIL was much undervalued.

On the next step, the official said, "We will now be calling the charted accountants of these companies and if their reply is not satisfactory then a show cause-cum-demand notice will be issued."

He said the violation could be to the tune of Rs 100 crore.

As per provisions of the Foreign Exchange Management Act (FEMA), a share cannot be sold a lower price.

The official added they have found a similar discrepancy in price during the transfer of shares of another IPL team and the agency is likely to get the valuation report in the due course of time.

Earlier this week the ED had issued notices to four IPL teams namely Kings XI Punjab (Jaipur IPL Cricket), Rajasthan Royals (KPH Dream Cricket), Mumbai Indians (Indiawin Sports) and Chennai Super Kings (Ms India Cements) under provisions of FEMA.

KKR officials were not available for comment.