ITC Ltd has decided to seek a three months extension from the Enforcement Directorate (ED) to answer to the show-cause notice served by the Directorate on alleged Foreign Exchange Regulation Act (Fera) violations. ITC has to reply to the show cause by August 21.
The ED, which had slapped a $114 million case against ITC, had directed the company to reply to the show-cause within 30 days. ITC sources said considering the numerous documents attached with the show-cause and the various allegations, lawyers will take more time before they can file their replies.
The ED is likely to issue two more chargesheets to ITC Ltd shortly. These chargesheets, which would cover alleged Fera violation charges to the tune of $5 million each, is expected to be issued to the executive directors on the board of ITC Ltd during the year 1991-92 and 1993-94.
These two additional chargesheets will be covering Fera violations in connection with the Bukhara restaurant case. Besides these two, there are five other show-cause notices in the pipeline which will be issued later. These seven show-cause notices together would cover additional foreign exchange violations to the tune of $40 million.
The directorate has identified around 13 executive directors who will be issued notices in the second round. These executives will be chargesheeted as functionaries of the company and not as individuals. However, the agency has still not decided whether non-executive directors, including financial institution nominees and BAT executives, will also be named in the second show-cause notices.
The chargesheets will be issued by the headquarters of the ED. The Calcutta zonal office has already sent the draft of the show-cause notice to the headquarters for verification and scrutiny.
ED had earlier issued an initial set of five chargesheets which said ITC and its board were responsible for Fera violations primarily in connection with the arrangement with Chitalias.
All the 20 members of the board of directors have been chargesheeted under Section 68 of Fera which provides that every person named in the chargesheet "shall be deemed to be guilty till such time they are able to prove that the contravention took place without their knowledge, and they exercised all due diligence to prevent such contravention".
