New Delhi, The Enforcement Directorate (ED) on Thursday said it has closed a foreign exchange violation probe against a Gujarat-based pharmaceutical company after the RBI issued a compounding order based on a “no objection” given by the central agency.
The alleged contravention under the Foreign Exchange Management Act (FEMA) involved transactions worth over Rs 85 crore concerning Apothecon Pharmaceuticals. The Reserve Bank of India (RBI) compounded the contraventions with a one-time payment of Rs 40.52 lakh, the ED said in a statement.
The agency initiated the investigation against the company based on “credible information.”
“The Reserve Bank of India (RBI) has issued a compounding order on July 6 under section 15 of the FEMA in the case of Apothecon Pharmaceuticals which resulted into closure of investigation against the company for the compounded contraventions…the said order has been passed by RBI after issuance of a No Objection by the ED,” the agency said.
The agency was probing a total of FEMA contraventions under 11 heads against the company.
The company filed an application before the RBI for compounding of the contraventions under FEMA while the investigation was underway.
A compounding order in the regulatory context means a formal decision taken by an authority to settle an offence by allowing the defaulter to pay a monetary penalty instead of facing prosecution.
Compounding is a provision available in FEMA, and the ED has been promoting it since last year in the spirit of the Union government’s “ease of doing business” and as a measure to reduce litigation. PTI
