1 May 2002
AMITABH BACHCHAN GETS NOTICE FOR
FERA VIOLATION
From Jal Khambata
NEW
DELHI: Superstar Amitabh Bachchan has fallen in the FERA (foreign
Exchange Regulation Act) net and accused of siphoning off US $6 lakhs
(Rs 2.70 crores) from the earnings of the "Miss World"
pageant he organised in Bangalore in 1996. He has been charged with
contravention of Section 16(1) of FERA.
A show-cause notice
was issued to him as the Chairman of the Mumbai-based Amitabh
Bachchan Corporation Limited (ABCL) on Monday asking him to explain
"within ten days" as to why he should not be booked and
proceeded with under Section 50 and 51 of FERA as well as under
Sections 49(3) and 49(4) of the Foreign Exchange Management Act
(FEMA).
The Enforcement Directorate has been investigating the
foreign exchange fraud for quite long but it decided to hurry up with
the notice in view of the fact that FERA is lapsing this month end
and is to be succeeded by a less punitive FEMA from June 1. The
stringent actions possible under FERA would not have been possible
after it lapses.
An identical notice has also gone out to
ABCL's Chief Executive Officer Sanjiv Gupta for the contravention of
FERA, the Enforcement Directorate sources said. Amitabh and Bachchan
were "in charge and responsible" for the conduct of ABCL's
business, the sources said.
They pointed out that ABCL had
entered into an event management agreement for organising the "Miss
World" 1996 Pageant with Messrs Marketing and promotional
Service Limited, a company incorporated in Channel Islands, known as
a tax heaven. The said company has the registered office at 51, Bath
Street, St Helie Jersey JE4 OXP, Channel Island.
In terms of
Clause 9.2 of the Agreement, ABCL was supposed to receive US
$6,00,000 from MPL of Channel Island as the event management fee, but
it has not received the amount even after six years of completion of
the event. Since the event was held in India,
ABCL should
have deducted its fee before transmitting the earnings to the foreign
firm. The mandatory permission of the Reserve Bank of India (RBI)
required for the foreign exchange transfer was also not obtained by
Amitabh Bachchan's company, the sources added.
Only a few
months ago, the same ABCL was in the news for being forced to pay off
huge sum to Doordarshan as royalty for certain programmes. Samajwadi
Party General Secretary Amar Singh had come to the rescue of his
friend Amitabh Bachchan to save him from a criminal prosecution and
seizure of his properties by persuading Doordarshan to get back the
money, without interest, in three installments. Amitabh has paid off
the money but he is yet to pay the interest that had accrued on
account of his default.
Since it is an old case ripped open
now, the BJP-led NDA Government may be accused of carrying out a
political vendetta against Amitabh Bachchan for helping out the
Samajwadi Party of Mulayam Singh Yadav in the Uttar Pradesh Assembly
elections early this year. END