Enforcement Directorate to re-investigate Sunanda Pushkar's FEMA violation case

After two years of investigation in Sunanda Pushkar death case, the Economic Offence Wing (EOW) of Delhi Police has now written a letter to the Enforcement Directorate (ED) to probe alleged financial irregularities related to the Kochi IPL franchisee - linked with Congress leader Shashi Tharoor.

This could be questionable that why the EOW of Delhi Police was unaware about the fact that the ED officials of Mumbai zonal office had been investigating this case since the beginning of IPL controversy, but never reached to its conclusion, till date.

"The investigation was never completed", the source within the agency told Indiatoday.in .

In June 2015, Indiatoday.in had revealed that in its preliminary investigation, the ED had found that Sunanda Pushkar had violated certain FEMA rules.

ED REPORT

As per the available information, Sunanda was the co-owner of Rendezvous Sports World Pvt Ltd (RSWPL) with a sweat equity of 25 per cent. Allegations were made that she acted as a 'proxy' for Shashi Tharoor to get free stake in the company.

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In 2012, Sunanda had gone to ED's Mumbai office to give her statement in connection with IPL Kochi investigation. After completing its inquiry, a complete report (confidential) was tabled before the Special Director of Mumbai Zonal Unit of ED - with a request to investigate it further against the individuals for adjudication of the contravention.

"But it never happened, in fact, the report was put in the cold storage - without exploring it further", sources said.

WHAT SUNANDA STATED

The statement of Sunanda Pushkar was recorded under Section 37 of FEMA, 1999 on 22/10/2011 and 11/02/2012 - where she, inter alia stated:

-- When the second round of IPL bidding for two franchisees were contemplated, she was contacted by Ravi Gaikwad (owner of RSWPL), who sought her assistance in working for an IPL team.

-- She agreed to provide her services in the event of the consortium winning the bid since she held expertise in event management.

-- She was compensated for her service by allotment of 190 shares of face value of Rs 100 at par which amounted to 19 per cent shareholding of the company.

-- She was expecting a fee of above 17.5 per cent of the sponsorship amount and sale of other rights that could be exploited by marketing, which is a global standard for marketing and branch management services.

-- She realised that the company had a capital base of Rs 1 lakh only and the company had not undertaken any business activity and hence it was not in a position to compensate her according to the market standards.

-- Shares were transfered in her name on 10/3/2010 and she got 95 shares, each from Kisan Baburao Gaikwad and Pushpa Kisan Gaikwad. The valuation was done by the transferring company.

-- She made a payment of Rs 9,500 each with two cheques dated 10/3/2010 from her NRO account with HDFC Bank.

-- But later, after IPL controversy, she signed the transfer deed on 8/9/2010 in favour of Pushpa Gaikwad by transferring 190 shares held by her, that she had received Rs 19,000 by cheque from Pushpa Gaikwad and the cheque deposited in the NRE account which was not accepted by the bank.

FEMA VIOLATION BY SUNANDA PUSHKAR

According to ED report, investigation in the matter has revealed that payment had been made by Sunanda Pushkar from her NRO account.

As per extant provisions of FEMA, shares can be issued to a non-resident against receipt of funds through normal banking channels. If the funds are not received through normal banking channels, prior approval of the government is required. The provisions of FEMA do not permit, issue or transfer shares of an Indian company against payments for services.

Therefore, in the case of Sunanda Pushkar, the ED official concluded in the report, saying, "It is seen from the aforesaid that the transactions involving transfer of shares from Kishan Gaikwad and Pushpa Gaikwad to the non-residents namely Sunanda Pushkar were not consistent with the guidelines issued under the master circular 2 of 2009 and in contravention of the provisions of FEMA, 1999 and FEMA notification."

If Sunanda was alive, she would be liable to face the action, but as she is no more - FEMA provisions do not allow the ED to take any action in the case.

SHASHI THAROOR'S STATEMENT WITH ED

During the course of investigation, ED questioned Shashi Tharoor. As per ED's confidential report, Tharoor stated that he was not involved in the IPL team auctions. He also added that he was approached by one Gaikwad who sought his "blessings" to mount a bid.

According to Tharoor, only after Gaikwad's request, he made a few calls to Lalit Modi about the process and formalities required for the bidding. Gaikwad had sought advice from Tharoor about marketing strategies.

Surprisingly, in Sunanda Pushkar's and Shahshi Tharoor's statements, there were no queries from the investigators regarding the alleged sweat equity of Rs 70 crore.

The ED concluded in its report saying, "Tharoor ensured cancellation of the bid, providing an opportunity to the Unincorporated Joint Venture (Kochi team) to mount a bid, enabling them to qualify with the substantially moderated eligibility conditions for the tender".

In 2012, the ED probe was getting monitored by the UPA government. "Since beginning, the agency had been told to remain soft against Pushkar and Tharoor, while questioning and making this report", sources said.

After getting a request letter from Delhi Police, ED headquarters has directed the Mumbai team to re-investigate the case.