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KKR's Ownership Transfer, Donations Under Scanner

IPL franchisee Kolkata Knight Riders' (KKR) appears to be headed for trouble with the government finding out discrepancies in the company's operations, including issues related to change of ownership due to related-party transactions as well
PTI May 06, 2010 9:55 IST
PTI
IPL franchisee Kolkata Knight Riders' (KKR) appears to be headed for trouble with the 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, reports The Times of India.

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 was violative of the franchisee agreement, the report said, pointing out that this was not permitted 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 Shahrukh 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.