Apollo Hospitals Gets Relief as FEMA Proceedings Are Officially Closed

Summary:
The Reserve Bank of India (RBI) has closed FEMA-related proceedings against Apollo Hospitals Enterprises Ltd and five of its directors through a compounding order. As part of the settlement, Apollo Hospitals paid ₹17.76 crore, while each director paid ₹18 lakh. The case involved alleged foreign exchange violations worth over ₹2,424 crore, including issues related to foreign direct investment, foreign currency convertible bonds, and foreign shareholding limits. Following the RBI’s order and a no-objection from the Enforcement Directorate (ED), all adjudication and legal proceedings in the matter have been concluded. 

Regulatory proceedings related to foreign exchange violations against Apollo Hospitals Enterprises Ltd and five of its directors have been brought to a close after the Reserve Bank of India (RBI) issued a compounding order. Under the settlement, Apollo Hospitals paid a one-time compounding fee of ₹17.76 crore, while each of the five directors deposited ₹18 lakh.

A compounding order enables entities to resolve regulatory breaches by paying a prescribed monetary amount, avoiding lengthy adjudication or prosecution processes.

According to the Enforcement Directorate (ED), the matter involved alleged violations of the Foreign Exchange Management Act (FEMA) exceeding ₹2,424 crore. The allegations were linked to foreign direct investment (FDI) in a restricted sector, acceptance of FDI without mandatory government approval, issuance of foreign currency convertible bonds (FCCBs), and exceeding the permitted foreign investment limit under the FII-PIS framework.

The RBI passed the compounding order under Section 15 of FEMA after obtaining a “No Objection” from the ED. The order applies to Apollo Hospitals Enterprises Ltd and its directors, including Preetha Reddy, Suneetha Reddy, SK Venkatraman, Akhileswaran Krishnan, and SM Krishnan.

The ED stated that the RBI’s decision has effectively concluded the FEMA adjudication process and brought an end to further legal proceedings in the case. The agency added that it has been encouraging the use of FEMA compounding mechanisms in suitable matters to reduce litigation and support ease of doing business initiatives.