The ED is in the process of serving final penalty notices in 16 alleged forex violation cases amounting to an estimated Rs 1,700 crore against former IPL Chairman Lalit Modi and others as part of its wide-ranging probe in the alleged financial irregularities in various editions of the T-20 cricket extravaganza.
High-level Enforcement Directorate sources said apart from these cases, two other instances of suspected contravention of foreign exchange laws and hawala transactions are also being investigated by the central probe agency and these include investigations on the role of Modi.
Investigation in a third case of money laundering against the former cricket czar, sources said, is also "underway" which is related to the alleged misappropriation of funds in allotment of cricket media rights by BCCI in 2009.
"About 16 cases being probed under the Foreign Exchange Management Act (FEMA) are in the final stages of adjudication, which means final orders for penalty will be served in the coming months against the accused which includes all the important functionaries of the IPL-BCCI including Modi.
"The cases amount to violations of an estimated Rs 1,600 crore and the the maximum penalty that can be slapped on the accused could be three times of this amount," a source said.
The agency,
in February, had slapped a similar Rs 425 crore show-cause notice against Modi, former BCCI boss Srinivasan, the IPL, private multimedia firms for alleged contravention of forex laws in awarding a cricketing media rights contract in 2009.
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Hindustan times.
ED set to slap penalty notices on Lalit Modi over forex violations
After the adjudication process is completed, the ED may issue final orders for payment of penalty but no decision on this has been taken so far, sources said.
A penalty worth three times the amount involved could be ordered by the adjudicating authority, which would then have to be realised by the ED, said an agency source.
“On completion of the adjudication process, the ED is likely to issue final orders for penalty in the coming months against those facing the probe, including Modi,” said the source.
“UK authorities, the country where Modi is currently based at, treats FEMA (Foreign Exchange Management Act) as a civil law. And they share information only in criminal cases,” said a top
ED officer, indicating that not enough information was forthcoming from that country.
Other than Modi, most parties, including Board of Control for Cricket in India (BCCI) office-bearers involved in conducting the IPL, had recorded their statements, ED sources said.
“A probe was initiated in 2010 on various counts of irregularities that came to light. One of the issues involves BCCI operating a bank account in South Africa without requisite permissions from the Reserve Bank of India (RBI),” said an ED officer, requesting anonymity.
As per FEMA rules, to open and operate an account abroad, an Indian person or entity needs to seek the RBI’s permission.
Sources said the
BCCI transferred over Rs 200 crore worth of foreign exchange to that account through Cricket South Africa, again in contravention of FEMA provisions. The ED found that the BCCI spent money from that account for IPL season two.
Also on the ED radar are FEMA violations whereby the BCCI allegedly received ‘performance deposits’ from foreign companies.
The probe revealed the board had not taken permission from the RBI to accept such deposits from persons residing out of India, ED officials said.
