HYDERABAD: The Telangana High Court issued an interim stay on the penalties imposed by ED against MP K Ragurama Kirshnam Raju. The high court was hearing a petition, filed by the MP, challenging the ED’s orders imposing a penalty of Rs 40 crore on the grounds of alleged violations of the provisions of the Foreign Exchange Management Act, 1999 (FEMA).
MP Krishnam Raju was known for his involvement in various business sectors, particularly in the power industry, and established numerous enterprises across different states in India. One of these ventures, M/s Ind Barath Sun Energy Private Limited (IBSEPL), received Rs 202 crore as foreign direct investment (FDI) from M/s Strategic Energy Investments Limited (SEIL), Mauritius, under the automatic route. Equity shares were allotted to SEIL as part of the investment process. Meanwhile, the IBSEPL also invested Rs 200 Crore in another company as a downstream investment.
The ED initiated an inquiry and subsequent investigation, leading to the issuance of an order on November 3, 2023. The order alleged that the petitioner failed to obtain prior government approval concerning the foreign investment, thereby violating Section 6(3)(b) (the reserve bank may, by regulations, prohibit, restrict or regulate among other things, transfer or issue of any security by a non-resident) of FEMA.