The alleged four-point contraventions which were finalised for adjudication under the Foreign Exchange Management Act (FEMA) post the investigation totalled more than Rs 2,424 crore, the central agency said in a statement.
It said the Reserve Bank of India (RBI) has issued a compounding order under Section 15 of FEMA in the case of Apollo Hospitals Enterprises Limited and its five concerned directors/ officers — Preetha Reddy, Suneetha Reddy, S K Venkatraman, Akhileswaran Krishnan and S M Krishnan.
“This has resulted in the termination of adjudication proceedings under the provisions of FEMA against the company with regard to aforementioned contraventions as well as further litigation,” according to the ED.
The order was passed by the RBI after issuance of a “No Objection” by the ED.
The agency said it investigated FEMA “contravention” by the company and its directors on four counts which included receiving foreign direct investment (FDI) in retail trading (a prohibited sector for FDI) and subsequent receipt of FDI without requisite government approval; issuance of foreign currency convertible bonds (FCCBs); receiving foreign investment under FII-PIS route and breaching overall sectoral cap limit of 51 per cent (for foreign share holding prescribed for multi-brand retail trading).
The total sum involved in these alleged contraventions was more than Rs 2,424 crore, it said.”The contraventions have been compounded with a one-time payment of Rs 17,76,80,121 by Apollo Hospitals Enterprises Limited and Rs 18 lakh each by the directors/ officers mentioned above,” it said.
A compounding order in the regulatory context means a formal decision taken by an authority to settle an offence by allowing the defaulter to pay a monetary penalty instead of facing prosecution.
Compounding is a provision available in FEMA, and the ED has said that it was promoting this provision in select FEMA cases since the last year, in the spirit of the Union government’s “ease of doing business” and as a measure to reduce litigation.