After going soft for 5 months, ED issued third summon to SRK

A week back, IndiaToday.in published an exclusive piece on how the Enforcement Directorate was going soft on bollywood actor Shah Rukh Khan in a foreign exchange violation case. Soon after, the agency decided to issue the third summon to Shah Rukh Khan (SRK).

SRK has been directed to remain present before the Mumbai ED office in the first week of November, before Diwali.

If the actor agrees to come and convey his confirmation to the ED officials, than it would be his second round of questioning in FEMA case.

However, the spokesperson of Shah Rukh Khan has denied, "receiving any such summon from ED".

As per the investigation of ED, SRK's IPL franchisee, the Knight Riders Sports Pvt Ltd (KRSPL) is suspected to have violated FEMA (Foreign Exchange Management Act) norms by undervaluing its shares in a transfer deal with Jay Mehta's overseas company, Sea Island Investments Ltd (SIIL).

First time on November 2011, ED questioned SRK to explain the details of transactions / aspects of the KRSPL deal, due diligence conducted on SIIL before allotment of shares to them and reasons behind KRSPL allotting 50 lakh shares to SIIL at a value which appears to be understated.

Second time, SRK ignored the second summon issued by ED with a direction to remain present on May 26, 2015.

Almost after five good months, the agency issued its the third summon to SRK - who is continuously busy in film shooting at Hyderabad.

Meanwhile, the agency interrogated Jay Mehta (skipping Juhi Chawla) and recorded his statement in the FEMA case, ED official confirmed to Indiatoday.in.

"The IPL cases related to former IPL Commissioner Lalit Modi took our maximum time. Even today, we are expecting a Red Corner Notice (RCN) from Interpol against Modi, by the end of October. On above, our investigative officers (IOs) are continuously busy in probing Modi's links with various individuals in India and abroad, under money laundering act," the ED official said while trying to justify why it took almost five months to call the bollywood actor again at its doorsteps.

Sources say, some months back, Jay Mehta had tried to throw his weights in the finance ministry. "He had complained (in written) to the top officials in the finance ministry, on why KKR team is getting summoned and asked to remain present before the ED office," the ED official said.

On May 13, 2015, Indiatoday.in, exclusively exposed an audit done by Choksi & Choksi Ltd (on the directions of ED) has arrived at a conclusion that the transfer of shares between SRK's KRSPL and Jay Mehta-owned Sea Island Investment (SIIL) was undervalued by the entities involved.

As per the audit report, SRK had transferred his equity shares at the valuation of Rs 10 per share to Jay Mehta and Juhi Chawla. "But the surprising element here was the original value of those shares was not Rs 10 per share but was in the range of Rs 70-99 per share," the ED official said.

ED suspect that on behest of SRK, crores of money (approximate Rs 70-72 crore or may be above) has been diverted to SIIL in Mauritius and later, a round tripping have been done.

"To get answers on these information/details, the questioning of SRK is very crucial. Unless that happens, our investigation would not get completed and we would not able to issue a show cause notice (SCN) to all concerned parties," the official said.