Shriram Supply Finance Company (STFC) on Tuesday said a penalty of Rs 5 crore has been imposed on the company through an Enforcement Directorate order in relation to an out of date case of issuing warrants.
The company said it had received a show goal perceive (SCN) from the Enforcement Directorate (ED) in relation to issue of warrants by the use of erstwhile Shriram Holdings (Madras) Pvt Ltd (SHMPL), which was once as soon as amalgamated with STFC in April 2012, to a person resident outside India in 2006.
The company represented itself with comparable information and data that it was once as soon as of the bona fide view that it had not contravened any of the provisions of the Out of the country Trade Keep watch over Act (FEMA). “However, the company received an order dated March 4, 2020, from ED yesterday (March 9, 2020). The order imposes on the company a penalty of Rs 5 crore in connection with the matter citing contravention of provisions of Section 6(3)(b) of FEMA, 1999, read with Regulation 4 of Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000,” it said in a regulatory filing.
In this regard, the ED has moreover levied the penalty of Rs 50 lakh each on three folks, the then directors of the erstwhile SHMPL, it added. STFC said the company continues to consider and hold the view that SHMPL had the comparable approval for global equity participation of up to 74 in line with cent by means of investment through subscription and/or subsequent acquisition of up to 74 in line with cent of the equity shares of SHMPL.
SHMPL had issued warrants to the extent of Rs 243.60 crore in 2006 which were reworked into equity shares during the stipulated limit. “The company’s view was once as soon as further reinforced consistent with the clarifications were given from the Department of Monetary Affairs.
“The company is at the moment examining the order and examining all possible choices to take the subject to closure, along side the option to contest the an identical with the comparable govt,” it said further. On Monday, STFC had clarified that it does not hold to any extent further tier-I bonds of cash-strapped Positive Monetary establishment.
Clarifying to a media report, Shriram Supply Finance in a regulatory filing said that the “company does not hold any additional tier I bonds of Yes Bank Ltd”. “The company had invested in Upper Tier II Bonds of Yes Bank Ltd of Rs 50 crore in the year 2010 and the same are outstanding as on date,” it said on Monday.
Probably the most an important largest losers in case the RBI’s restructuring scheme for Positive Monetary establishment goes through will be the additional tier-I bond holders who have bets totalling to Rs 10,800 crore on the lender. The Reserve Monetary establishment of India on Thursday imposed a moratorium on Positive Monetary establishment, capping withdrawals at Rs 50,000 in line with account, and outdated the non-public sector lender’s board with speedy have an effect on. Positive Monetary establishment will not be able to grant or renew any loan or advance, make any investment, incur any criminal accountability or comply with disburse any rate.