Tribunal clears Lalit Modi of FEMA breach over 2009 IPL held in South Africa

New Delhi: Former Indian Premier League (IPL) chairman Lalit Modi has secured major relief after an appellate tribunal overturned an Enforcement Directorate (ED) penalty order issued against him and others in a 15-year-old case under the Foreign Exchange Management Act (FEMA) linked to the 2009 IPL held in South Africa.

Reacting to the verdict, Modi said the ruling was not only a personal vindication but also reaffirmed that allegations must ultimately be judged on the basis of evidence and the rule of law.

The 2009 IPL season was shifted to South Africa after security concerns arose due to the simultaneous conduct of India's general elections.

The case stemmed from the transfer of funds by the Board of Control for Cricket in India (BCCI) to South Africa to organise the tournament. The ED alleged that the transfer violated FEMA provisions.

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The primary allegation concerned the remittance of foreign exchange amounting to USD 49,862,799 (more than Rs 243 crore) to an overseas entity without obtaining prior approval from the Reserve Bank of India (RBI).

The ED issued FEMA show-cause notices in 2011 and later passed penalty orders in 2018 against Modi, several former BCCI officials and other individuals.

Those penalised challenged the ED's decision before the Appellate Tribunal constituted under the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act (SAFEMA).

In a 105-page judgment dated July 16, a division bench comprising Chairman Justice Munishwar Nath Bhandari and Member Rajesh Malhotra ruled that there was no material establishing Modi's responsibility in the alleged violations.

The tribunal observed that Modi "was not in-charge of the affairs and otherwise he has been framed in the case without any material showing his responsibility".

It further held, "The penalty imposed on Shri Lalit Modi is wholly erroneous is thus interfered."

Modi, who is currently based overseas, welcomed the ruling in a statement issued through his lawyer, Mehmood Abdi.

"For over sixteen years I have consistently maintained one simple position: I acted in good faith, in the best interests of Indian cricket and the IPL, and committed no personal wrongdoing.

"This judgment is not simply personal vindication. It reaffirms the importance of due process, objective legal analysis and the principle that allegations must ultimately be tested against evidence and law," Modi said. (PTI)