Appellate Tribunal Overturns Most FEMA Charges Against BCCI, Lalit Modi in IPL Shift Case
The Appellate Tribunal under the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act (SAFEMA) has set aside most of the Enforcement Directorate's (ED) findings and penalties against the Board of Control for Cricket in India (BCCI), former Indian Premier League (IPL) chairman Lalit Modi, and other appellants in a Foreign Exchange Management Act (FEMA) case related to the 2009 IPL's relocation to South Africa.
The ED had alleged that the BCCI violated FEMA provisions by remitting funds overseas to organise the tournament and had imposed penalties amounting to several crores on the Board and its office-bearers.
A bench of the Tribunal, comprising Chairman Justice Munishwar Nath Bhandari and Member Rajesh Malhotra, partly allowed the appeals against the ED's order dated May 31, 2018. That order had imposed penalties on the BCCI, Mr. Modi, former BCCI president N. Srinivasan, M.P. Pandove, the State Bank of India (SBI), and its former Chief Manager A.K. Nazeer Khan for alleged FEMA violations.
In its order, the Tribunal set aside most of the ED's conclusions against the BCCI, Mr. Modi, and the other appellants. It also cleared SBI, the authorised dealer bank, and Mr. Khan of liability, holding that the foreign remittances were processed in the ordinary course of banking operations and did not constitute FEMA violations on their part.
However, the Tribunal upheld the ED's findings on two specific counts. It retained a penalty of ₹4 crore imposed on the BCCI for remitting an amount abroad that exceeded what was reflected in its books of accounts. The Tribunal also agreed that there had been a delay in bringing back the proceeds from ticket sales to India. While it upheld the finding of a FEMA violation on this count, it reduced the penalty on the BCCI from ₹4 crore to ₹1 crore, observing that the funds had eventually been repatriated.
In response to the order, Mr. Modi stated, 'For over sixteen years, I have consistently maintained that I acted in good faith, in the best interests of Indian cricket and the IPL, and committed no personal wrongdoing.'
