The case against the Shah Rukh Khan, who co-owns IPL team Kolkata Knight Riders (KKR), is an old one. The investigations stated that the shares’ market value was between Rs 86 to Rs 99, but they were sold at Rs 10 each leading to loss of taxes to the government. ED sources said before the agency authority passes the final “adjudication order” and slaps a penalty quantum on the actor it needed to “ascertain” the beneficiaries of the undeclared funds.
The case, dating back to 2008-09, pertains to the share sale of KRSPL, which is owned by Khan’s Red Chillies along with Juhi Chawla and her husband Jay Mehta.
It’s also reported that the undervaluation of the entity has led to a loss of foreign exchange to the extent of Rs. 73.6 crore.
Earlier in March this year, the ED had sent a show-cause notice to Khan, his wife Gauri, actress Juhi Chawla, and others for the alleged loss. The office of ED’s Special Director had sent the notices to them, mentioning the irregularities and seeking a reply from them.
These shares, according to the ED, were allotted at a par value of Rs 10 a piece, whereas the actual value of these shares was much higher. ED officials said SRK would be “asked be explain his side of the story” as the sale of shares at undervalued rates caused alleged loss Rs 73.6 core in foreign exchange.
Since the beginning, Khan’s company KRSPL had been contesting with ED probe and audit findings by claiming that they computed the share issuance under net asset value method (NAV) prescribed under FEMA, 1999. Star kids are nearly always captured by the press wherever they go no matter how much they try to avoid it. Shah Rukh Khan recently asked a photographer to not be harsh towards the kids and also spoke about it in an interview.
The valuation report submitted by KRSPL to ED said, “The company (KKR) is recently incorporated and there is no certainty about the profitability of the company”.