The Reserve Bank of India (RBI) has issued compounding orders under Section 15 of the Foreign Exchange Management Act, 1999 (FEMA) for Joinmay Electronic Private Limited and Universal Biofuels Private Limited. This action follows the termination of investigations against the two companies for violations of FEMA provisions. The compounding orders were issued after the Directorate of Enforcement (ED) granted “No Objection” in each case.
Section 15 of FEMA allows individuals or companies to admit to violations voluntarily, pay penalties, and regularize contraventions without prolonged legal proceedings. In the case of Joinmay Electronic Private Limited, the ED initiated an investigation based on delayed reporting of foreign inward remittance receipt for equity instruments worth Rs 10 crore. The company applied for compounding of these contraventions under FEMA Section 15, which was approved by the RBI upon ED’s no objection.
For Universal Biofuels Private Limited, the ED investigated non-compliance with FEMA regulations related to delayed exports after receiving advance payments. The company’s contravention, amounting to Rs 39.07 crore, was compounded by the RBI with a one-time payment of Rs 29.81 lakh. This compounding led to the conclusion of adjudication proceedings and further litigation under FEMA against the company.
