New Delhi: The Reserve Bank of India (RBI) on Wednesday issued a compounding order under Section 15 of the Foreign Exchange Management Act (FEMA), in the case of M/s. Apollo Hospitals Enterprises Limited and its five concerned directors and officers, including Preetha Reddy, Suneetha Reddy, S.K. Venkatraman, Akhileswaran Krishnan and S.M. Krishnan, which has resulted in termination of adjudication proceedings against the company for contraventions of provisions under FEMA with a one-time payment of Rs 17.77 crore.
In addition, each of the directors and officers of the company have to pay Rs 18 lakh.
The order has been passed by the RBI after the Enforcement Directorate (ED) issued a “no objection” in the case.
The ED had taken up investigation after receiving credible information in the case.
After completion of investigation, the ED filed a case under FEMA before the Adjudicating Authority.
The company, later on, filed an application before the RBI for compounding the contraventions in accordance with the provisions of Section 15 of the Act.
Section 15 provides a mechanism for individuals or companies to voluntarily admit to a violation of FEMA regulations, pay a penalty, and regularise the contravention without undergoing lengthy litigation or legal proceedings.
On reference from RBI, the ED issued no objection for such compounding in line with the true spirit of the Act.
Accordingly, the RBI, on the basis of no objection issued by ED, has compounded the contraventions in the case which include receiving FDI in retail trading, which is a sector in which foreign investment is prohibited.
A sum of Rs 859. 88 crore was involved in the contravention.
The complaint filed against Apollo Hospital Enterprise also included issuance of Foreign Currency Convertible Bonds (FCCBs) valued at Rs 70.02 crore in contravention of FEMA.
Besides, the company received foreign investment under Foreign Institutional Investor-Portfolio Investment Scheme route to the tune of Rs 623. 88 crore which in aggregate breached the 24 per cent paid-up capital limit.
The company also breached the overall sectoral cap limit of 51 per cent (for foreign shareholding prescribed for multi brand retail trading) with the sum involved in the contravention pegged at Rs 870.67 crore.
(IANS)
