New Delhi: Former Indian Premier League (IPL) chairman Lalit Modi has been granted significant relief by the tribunal court in a 15-year-old FEMA case relating to the hosting of the 2009 T-20 cricket tournament in South Africa.
What did the tribunal say?
A tribunal has set aside a penalty order issued by the Enforcement Directorate against Lalit Modi, the Board of Control for Cricket in India (BCCI) and some others in a 15-year-old FEMA case related to hosting of the 2009 T-20 cricket tournament in South Africa.
At that time, there were general elections in India, due to which the 2009 tournament was shifted to South Africa. The BCCI had moved funds to South Africa for the event, which the ED considered a violation of the Foreign Exchange Management Act (FEMA).
What is the case?
The BCCI and its officials were accused of violating the Foreign Exchange Management Act (FEMA). The BCCI, Lalit Modi, and N. Srinivasan were also involved in this case. The main charge was in regard to the transfer of foreign exchange worth USD 4,98,62,799 (equivalent to more than Rs 243 crore) to an entity outside India without prior approval of the Reserve Bank of India.
The court has now issued its verdict on some issues related to this case, bringing relief to all.
What is the whole matter?
In 2009, the IPL was moved from India to South Africa due to the general elections in India that year. At that time, the Enforcement Directorate (ED) imposed fines totaling crores of rupees on the BCCI, Lalit Modi, N. Srinivasan, and other officials for alleged violations of the Foreign Exchange Management Act (FEMA).
The ED alleged that rules were not followed in sending money abroad to organize the tournament. This order, dated May 2018, was appealed.
What did the tribunal say in its decision?
The Appellate Tribunal, constituted under SAFEMA, quashed most of the ED’s charges and penalties. The tribunal bench partially allowed the appeals. The tribunal stated that most of the transactions were routine and did not constitute FEMA violations. The State Bank of India and its officials were also exonerated because they processed the remittances through normal procedures.
The charge of delaying the repatriation of funds against Lalit Modi was dismissed. The tribunal noted that Lalit Modi had already been suspended when the funds were returned to India and was not responsible. The charge of non-repatriation of revenue was also dismissed. The tribunal held that the ED had ignored the terms of the agreement between the BCCI and Cricket South Africa.
The tribunal did not grant blanket relief. It upheld the ED’s decision on two limited issues: excess remittance and delays in receiving ticket sales proceeds. The BCCI sent more money abroad than shown in its accounts. The penalty of Rs 4 crore was upheld for this. Furthermore, there was a delay in bringing the money back to India. The original Rs 4 crore penalty was reduced to Rs 1 crore because the money was eventually returned.
