Enforcement Directorate summons Shahrukh Khan over Kolkata Knight Riders' irregular share sales

Shahrukh Khan could be in big trouble

Bollywood actor and Kolkata Knightriders (KKR) owners Shahrukh Khan has been called up by the Enforcement Directorate (ED), after the governing body found several irrgularities in the team’s share sales. One specific company, Knight Riders Sports Pvt Ltd (KRSPL) owned by Juhi Chawla’s husband, Jay Mehta, has been named as the benefactor.

This particular case date backs to 2008, when KRSPL was sold by Khan and Chawla. A source close to Sportskeeda said, “We dispatched the summons earlier this month. We need Mr Khan here to discuss some of the details of our investigation so far. Apart from that I’m not at liberty to reveal anything else.”

ED officials have stated that the shares were grossly undervalued, when the company was being sold to Mehta. The valuation is said to be eight to nine times lesser as compared to the original rate. In 2008, Red Chillies entertainment owned 9900 shares of KRSPL. The ED valuation puts the cost of each share between Rs 70 – Rs 85. However, the monetary transaction between Red Chillies and Mehta’s Sea Island investments was done at Rs 10 per share.

The ED has already recorded statement from Chawla and Mehta. They are now waiting for Khan’s version to narrow down on a verdict.

The Foreign Exchange Management Act states, “the price of shares issued to persons residing outside India should not be lower than the price worked out under the guidelines set by stock market regulator SEBI, in case of a listed company or on the basis of fair valuation of shares by a chartered accountant as per guidelines of the erstwhile Controller of Capital Issues (CCI).”

If the ED’s valuation of each share is correct, King Khan and co. could be in deep trouble. This is not his first tryst with the ED. In 2011, he was questioned by the ED about a foreign exchange violation of over Rs 100 crore.