RBI issues compounding order for FEMA violations in Kakinada Seaports case

New Delhi, Jan 9 The Reserve Bank of India (RBI) has issued a compounding order on December 12, 2025, under section 15 of the Foreign Exchange Management Act (FEMA), 1999, in the case of Kakinada Seaports Limited, which has resulted in the termination of the proceedings against the company for alleged contraventions of provisions of FEMA, according to an Enforcement Directorate (ED) statement on Friday.

The order was passed by the RBl after issuance of a "no objection" certificate by the ED, the statement said.

Based on credible information received in the case, the ED carried out an investigation against the company under the provisions of the FEMA. After completing the investigation, the ED filed a complaint before the adjudicating authority on September 5, 2024, under Section 16 of the FEMA, pointing out various contraventions under the FEMA for which compounding has now been done.

The contraventions include late reporting of foreign inward payments to the tune of Rs. 22.88 crore, delay in filing of Form FCGPR after issuing shares involving Rs 23.31 crore and delay in the allotment of shares under Paragraph 8 of Schedule 1 to 20 of the FEMA, covering Rs. 7.21 crore.

The adjudicating authority issued a show cause notice dated Sept,mber 30, 2024, under section 16 of FEMA, to the company and its directors and officers who were in charge and responsible for the conduct of the business of the company during the period of the contravention of the law.

The company, later on, filed an application before the RBI for compounding of the contraventions under FEMA as per the provisions of Section 15 of the Act. On reference from the RBI, the ED gave its "no objection" for such compounding in line with the true spirit of the Act, the statement said.

Accordingly, the RBI, on the basis of the “no objection” issued by the ED, has compounded the contraventions vide compounding order dated December 12, 2025, with a one-time payment of Rs 21.68 lakh. This has resulted in the termination of adjudication proceedings under the provisions of FEMA as well as further litigation against the company, the statement added.

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