The Enforcement Directorate (ED) on June 17 said it has closed its foreign exchange violation proceedings against Apollo Hospitals Enterprises Ltd and five of its directors after the Reserve Bank of India (RBI) issued a compounding order under the Foreign Exchange Management Act (FEMA).
According to the ED, Apollo Hospitals made a one-time payment of Rs 17.76 crore to settle the matter, while each of the five directors/officers paid Rs 18 lakh. The directors named in the case are Preetha Reddy, Suneetha Reddy, S.K. Venkatraman, Akhileswaran Krishnan and S.M. Krishnan.
The agency said its investigation had identified alleged FEMA violations involving transactions worth more than Rs 2,424 crore. These violations had been finalised for adjudication before the matter was settled through the compounding process.
The alleged contraventions included receiving foreign direct investment (FDI) in retail trading, a sector where such investment was prohibited at the time, accepting foreign investment without obtaining the required government approvals, issuing foreign currency convertible bonds (FCCBs), and receiving investments through the Foreign Institutional Investor–Portfolio Investment Scheme (FII-PIS) route beyond the prescribed sectoral cap of 51 per cent for foreign shareholding in multi-brand retail trading.
The RBI passed the compounding order after receiving a “No Objection” from the ED. As a result, the adjudication proceedings under FEMA against Apollo Hospitals and the concerned directors have been terminated, bringing an end to further litigation in the case.
Under FEMA, compounding allows violations to be settled through payment of a monetary penalty instead of prosecution. The ED said it has increasingly encouraged the use of this provision in selected FEMA cases as part of the government’s efforts to improve ease of doing business and reduce prolonged legal disputes.