The Reserve Bank of India (RBI) on Wednesday has issued a compounding order against Apollo Hospitals Enterprises Ltd and five of its directors and officers for multiple violations of the Foreign Exchange Management Act (FEMA), bringing regulatory proceedings against the company to a close.
The order has been passed by RBI after issuance of “No Objection" by the Directorate of Enforcement (ED).
The agency claims that the violations included the issue of foreign currency convertible bonds in violation of FEMA regulations, the receipt of foreign direct investment in a retail trading sector that was prohibited, and violations of sectoral FDI limitations. The total value of the transactions under investigation exceeded Rs 2,400 crore.
According to ED, each of the five directors paid Rs 18 lakh individually, and the company settled the dispute with a one-time compounding payment of Rs 17.76 crore.
After finishing its FEMA investigation, the ED initially submitted a complaint to the adjudicating authority. The RBI was then able to move forward with the compounding procedure after it provided a no-objection certificate.
Further legal action against the company on these counts is terminated by the settlement.
The five individuals included Preetha Reddy, Suneetha Reddy, S.K. Venkatraman, Akhileswaran Krishnan and S.M. Krishnan.
