Juhi Chawla and her husband Jaya Mehta were also summoned
By Sreekanth A Nair
The Enforcement Directorate (ED) questioned Bollywood superstar Shah Rukh Khan on Tuesday in connection with the alleged undervaluation of the shares of his Indian Premier League (IPL) franchise Knight Riders Sports Pvt. Ltd (KRSPL) to a Mauritius-based company.
Co-owners of the company Juhi Chawla and her husband Jaya Mehta were also summoned before the Enforcement Directorate.
ED sources quoted by Hindustan Times said, “We recorded Khan’s statement on Tuesday in connection with the violation of Foreign Exchange Management Act.”
It is reported that he was questioned for three hours.
The allegation is that the shares of Knight Riders Sports Pvt. Ltd. were undervalued when it was sold to Sea Islands Investments Ltd, a Mauritius-based company owned by Mehta, in 2008.
When Khan’s Red Chilies that owns the shares of KRSPL sold the share to Island Investment, it was issued only at Rs 10 each.
But the valuation report prepared by ED’s external agency states that when the shares were sold, the fair value of an equity share of KRSPL should have been in the range of 70 to 86 rupees.
As per the provisions of the Foreign Exchange Management Act (FEMA), when shares are issued to persons residing outside India, the shares should not be valued lower than the price calculated according to the guidelines drawn by Securities and Exchanges Board of India (SEBI) in the case of listed companies, or the price based on the fair valuation done by a chartered accountant as per the guidelines of Controller of Capital Issues (CCI).
Shah Rukha Khan was questioned back in 2011 on allegations of foreign exchange violation of Rs 100 crore. He was asked to summon before the ED in May, but could not make it because busy shooting.
Reports say that Khan co-operated with the officials and provided them with some documents.