The Reserve Bank of India (RBI) has issued a compounding order under Section 15 of the Foreign Exchange Management Act, 1999 (FEMA) to Jusda India Supply Chain Management Private Limited, requiring a one-time payment of Rs 12,52,984. This action has led to the conclusion of proceedings against the company for contraventions of FEMA, 1999, as confirmed by a statement from the Enforcement Directorate (ED) on Wednesday.
The compounding order was sanctioned by the RBI subsequent to receiving “no objection” from the ED, as stated in the announcement. Section 15 of FEMA offers a means for individuals or entities to acknowledge a violation of FEMA regulations, pay a penalty, and rectify the breach without undergoing prolonged legal processes.
Following an investigation initiated by the ED based on credible information, it was revealed that Jusda India Supply Chain Management Private Limited had issued shares worth Rs 18.5 crore to entities from a neighboring country without obtaining requisite government approval, leading to contraventions under FEMA. The company subsequently sought compounding of these violations under FEMA through an application to the RBI in accordance with Section 15 of the Act.
Upon receiving approval from the ED, the RBI proceeded to compound the contraventions, imposing a fine of Rs 12,52,984 through a compounding order dated April 8. Consequently, this resolution has resulted in the cessation of adjudication proceedings under FEMA against the company, thereby averting further legal action.
