Rajasthan Royals slapped with Rs.100 crore penalty

The Enforcement Directorate (ED) have fined IPL team Rajasthan Royals a sum of Rs 100 crore for violating forex laws in its business operations.

After two years of investigations, the notice was issued under the Foreign Exchange Management Act (FEMA). The agency has sent out three separate notices to the team that totals Rs 98.5 crore in addition to the sums demanded in other similar notices earlier, sources said.

The Jaipur IPL Cricket Private Limited (JIPL), its directors and the owners of Rajasthan Royals have been fined a Rs. 50 crore penalty, and a Rs. 34 crore notice for evasion of forex duties has been issued against EM Sporting Holding, Mauritius and its directors.

A fresh notice of Rs 14.5 crore has been issued against Ms ND Investments, United Kingdom and its directors.

The parties that are fined can appeal in the appellate authority of FEMA. The notice gives the IPL team a time of 45 days to pay.

Preliminary investigations pointed out that the funds in the firm have been remitted in an irregular manner and shares were allegedly issued in violation of forex rules stipulated and framed by the RBI.

The agency issued the first penalty order against Rajasthan Royals in mid-2011.

The penalty order states that the ED probe has found that foreign investments of the firm were in contravention of Section 6 of FEMA which deals with transfer or issue of security by a person resident outside India, and other sub-sections of the said Act.