New Delhi: The Reserve Bank of India (RBI) issued a compounding order, on February 10, under the Foreign Exchange Management Act, 1999 (FEMA), in the case of Metrocorp Infrastructure Limited, which has resulted in termination of adjudication proceedings against the company for contraventions of provisions of the law, according to an official statement issued on Thursday.
The order has been passed by the RBI after issuance of “No Objection” by the Directorate of Enforcement (ED).
The ED investigation was conducted after credible information was received in the case. After completion of the investigation, the ED filed a complaint under FEMA before the Adjudicating Authority for the late reporting of foreign inward payments to the tune of Rs 110.62 crore.
As per the provisions of FEMA, the adjudication proceedings were initiated by the Adjudicating Authority by issuance of a Show Cause Notice dated January 10, under FEMA, to the company and its directors who were in charge and responsible for the conduct of the business of the company during the relevant period of contravention.
The company, later on, filed an application before the RBl for compounding of the said contraventions under FEMA as per the provisions of Section 15 of the Act. On reference from the RBl, the ED issued no objection for such compounding in line with the true spirit of the Act, the statement said.
Accordingly, the RBl, on the basis of no objection issued by the ED, has compounded the said contraventions vide compounding order with a one-time payment of Rs 1, 03,320.
This has resulted in termination of adjudication proceedings with respect to aforementioned contraventions under the provisions of FEMA against the company, as well as further litigation, the statement added.
The RBI has the power under Section 15 of FEMA, 1999, to compound most foreign exchange contraventions, excluding Section 3(a) (e.g., hawala transactions). It assesses violations, calculates penalties up to 300 per cent of the amount (or Rs 200,000 for specific cases under the new 2025 guidelines), and issues orders within 180 days.
(IANS)
