Reserve Bank of India (RBI) has issued a compounding order in the case of Kakinada Seaports Ltd, bringing an end to adjudication proceedings initiated under the Foreign Exchange Management Act (FEMA), 1999, following a no-objection from the directorate of enforcement (ED).
According to ED, RBI passed the compounding order on 12 December 2025 under Section 15 of FEMA, resulting in the termination of proceedings against the company for alleged contraventions of foreign exchange regulations.
The case had its origins in an investigation initiated by ED after receiving what it described as credible information regarding violations of FEMA provisions by Kakinada Seaports. Following completion of the investigation, ED filed a complaint under Section 16 of FEMA before the adjudicating authority on 5 September 2024.
The complaint flagged three specific contraventions. These included late reporting of foreign inward remittances under Para 9(1)(A) of Schedule I to FEMA 20/2000-RB, involving transactions amounting to ₹22.87 crore. The second violation related to a delay in filing the foreign currency gross provisional return (FCGPR) form after the issue of shares to foreign investors under Para 9(1)(B) of Schedule I to FEMA 20/2000-RB, covering ₹23.31 crore. The third contravention pertained to delays in the issue or allotment of shares under Paragraph 8 of Schedule I to FEMA 20, involving ₹7.21 crore.
Subsequently, adjudication proceedings were initiated by the adjudicating authority, which issued a show cause notice on 30 September 2024 to Kakinada Seaports and the company directors and officers who were in charge of and responsible for the conduct of the company’s business during the relevant period.
Kakinada Seaports later approached RBI seeking compounding of the alleged contraventions under Section 15 of FEMA. On a reference from RBI, ED issued a no-objection certificate (NOC) for compounding, stating that the request was in line with the spirit of the Act.
Based on ED’s no-objection, RBI compounded the contraventions through its order dated 12 December 2025, subject to a one-time payment of ₹21.68 lakh. The compounding has resulted in the closure of adjudication proceedings under FEMA against Kakinada Seaports, as well as the termination of further litigation in the matter.
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