New Delhi, June 18 (IANS) The Reserve Bank of India (RBI) has issued compounding orders under Section 15 of the Foreign Exchange Management Act, 1999 (FEMA) against Sai Rayalaseeema Paper Mills and Cigniti Technologies Limited, which resulted in the termination of proceedings against the two companies for the contraventions under FEMA with one-time payments as fines, according to an ED statement.

The orders have been passed by the apex bank after issuance of “No Objection” by the Directorate of Enforcement (ED).

In the case of Sai Rayalaseeema Paper Mills Ltd, the termination of proceedings against the company for the contraventions under FEMA has been compounded with a one-time payment of Rs 19.18 lakh.

Section 15 provides a mechanism for individuals or companies to voluntarily admit to a violation of FEMA regulations, pay a penalty, and regularise the contravention without undergoing lengthy litigation or legal proceedings

The ED had launched an investigation against Sai Rayalaseeema Paper Mills based on credible information and found that the company had breached the provisions of FEMA. A case was registered against the company for the FEMA violations. Sai Rayalaseeema Paper Mills then filed an application with the RBI for compounding the contraventions.

The RBI order compounding the contraventions was issued on April 13.

In the second case, the RBI has issued a compounding order under Section 15 of the FEMA, in the case of Cigniti Technologies Limited and its Managing Director, C. V. Subramanyam, which has resulted in the termination of proceedings against the company. The compounding has been done with a one-time payment of Rs 13.82 lakh by Cigniti Technologies and Rs 1.38 lakh by Subramanyam.

The central bank has also issued a compounding order on June 10 in the case of FEMA violations by ZIFY TECH Solutions Private Limited, which has resulted in termination of proceedings against the company for the delay in filing its inward remittances under FEMA. The compounding has been done with a one-time payment of Rs 26,080.

The order has been passed after issuance of “No Objection” by the ED, the statement added.

–IANS

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