New Delhi, Feb 11 (LatestNewsX) The Reserve Bank of India (RBI) has issued a compounding order of the Foreign Exchange Management Act (FEMA) violations in the case of Deccan Digital Networks Pvt Ltd, according to a statement issued by the Enforcement Directorate (ED) on Wednesday.
The compounding order was passed by the Reserve Bank on January 14 under Section 15 of the Foreign Exchange Management Act, 1999 (FEMA), “in the case of Deccan Digital Networks Private Limited, which has resulted in termination of proceedings against the company for alleged contraventions of provisions of FEMA, 1999”, the ED statement said.
The agency statement further added that the said order has been passed by the RBI after issuance of ‘No Objection’ by the ED.
In this case, based on the credible information received, an investigation was taken up by the ED under the provisions of FEMA.
After completion of the investigation, ED filed a complaint under Section 16 of FEMA before the Adjudicating Authority on December 27, 2012, against Deccan Digital Networks, pointing out several contraventions under FEMA, 1999, for which compounding has been passed by the RBI.
These contraventions are late reporting of “foreign inward payments under Para 9(1) (A) of Schedule 1 to FEMA 20/2000-RB, covering Rs 11,82,84,399 and late filing of Form FCGPR after issuing shares under Para 9(1) (B) of the same Schedule 1 to FEMA 20/2000-RB, covering Rs 11,82,84,400”.
As per the provisions of FEMA, the adjudication proceedings were initiated by the Adjudicating Authority by issuance of a Show Cause Notice under Section 16 of FEMA to the company and its Directors/officers who were in charge and responsible for the conduct of the business of the company during the relevant period of contravention.
The ED statement said that the company, later on, filed an application before the RBI for compounding of the said contraventions under FEMA as per the provisions of Section 15 of the Act. On reference from the 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 said contraventions vide compounding order with a one-time payment of Rs 1,03,333.
“This has resulted in termination of adjudication proceedings under the provisions of FEMA, 1999, against the company for the said contraventions as well as further litigation,” said the ED statement.
na/vd
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