Aishwarya Rai Bachchan's day-long questioning by the Enforcement Directorate on Monday has brought focus on the more stringent provisions of the Foreign Exchange Management Act (FEMA), which allows the agency to seize property of equivalent value to that of immovable assets held abroad illegally—as well as to launch criminal proceedings.
While violating FEMA is not a criminal offence, the section being invoked by the ED can create more trouble for Aishwarya if the offence under it is proved. The actress has denied all charges.
The case in which Aishwarya has been questioned is under Section 37A of FEMA which deals with special provisions relating to assets held outside the country. The penalties under this section are wide-ranging: Apart from the confiscation of property of worth equivalent to that of the assets abroad, Aishwarya can also face a monetary penalty of up to three times the amount contravened, in case the offence is proved.
Aishwarya spent an entire day at the ED’s Delhi zonal office at Jamnagar House where she questioned about her alleged association with Amic Partners Limited, a company registered as an international business company in the British Virgin Islands, and mentioned in leaked records of the Panamanian legal firm Mossack Fonseca, sources said.
Aishwarya reached Jamnagar House on Monday morning and was questioned by sleuths till late in the evening.
The allegations surfaced as part of a 2016 Panama papers leak containing 11.5 million confidential documents that exposed the financial details of over 214,488 offshore entities. The leaked documents contained the financial information of many public figures including world leaders, politicians and corporate officials.
The company in this case was learnt to be registered on October 28, 2004, and is under scrutiny as it is alleged to have served as an offshore entity to park funds. While the information available with ED shows that the company has since been dissolved, sources said Aishwarya's alleged association as one of the four directors of the offshore entity has been a matter of investigation since 2016.
According to documents available with ED, Aishwarya along with her family members—father, mother and brother—were appointed directors of the company.
“The present case is not linked to Bachchan family but the company in which Rai was an alleged partner,” a source said.
Sources told THE WEEK that Aishwarya's husband Abhishek Bachchan was also summoned by the ED a few months ago, in a separate case. He had also appeared at the Delhi office and answered most of the questions posed by the sleuths.
Aishwarya had been issued summons twice, but was unable to appear earlier and had sought a later date.
All eyes are on the direction this probe takes in the coming days and months.
If the agency establishes its case for prosecution under section 37A, ED sleuths can proceed further with charges that could lead to imprisonment.
“If the adjudicating authority, after recording the reasons in writing, recommends initiation of prosecution and if the Director of Enforcement is satisfied, he can direct prosecution,“ reads the law.
Civil imprisonment can also take place if the offender fails to pay the penalty within a stipulated time.
Aishwarya's appearance at the ED and her responses can set the pace of the investigation in the Panama papers case in the days to come. For now, if the investigators require more details, they can summon her again or she can be issued a show-cause notice by the agency.