Indian Premier League (IPL) franchisee Kolkata Knight Riders’ (KKR) owned by Bollywood actor-producer Shah Rukh Khan appears to be headed for trouble with the Union Government finding out discrepancies in the company’s operations, including issues related to change of ownership due to related-party transactions as well as not making statutory filings.
Importantly, a report by the Registrar of Companies (RoC) has also made note of KKR’s Rs 50 lakh donation to the Rajasthan chief minister’s relief fund, flagging it off in a note before the corporate affairs ministry.
The report by the RoC Mumbai has found the change in KKR ownership — leading from related-party transactions — not in line with the rules governing IPL franchisees. There was “change in control” of the company which violates the terms and conditions of the franchisee agreement, in view of not having permission for such transactions before a period of three years and that too only after permission from the IPL/BCCI.
The related-party transactions in KKR entailed actress Juhi Chawla selling her entire holding to Sea Island Investments, a Mauritius-based company promoted by her husband Jay Mehta. Also, it made mention of Shah Rukh Khan and his wife Gauri selling stakes to their company Red Chillies.
The report also mentioned several procedural and statutory violations made by KKR. This included not informing the central government while increasing the share capital of the company to Rs 20 crore.