The Reserve Bank of India (RBI) has issued a compounding order on December 12, 2025, in a case involving Kakinada Seaports Limited for violations under the Foreign Exchange Management Act (FEMA), 1999. With this order, the proceedings against the company for the alleged FEMA contraventions have been closed.
The compounding order was passed under Section 15 of FEMA after the Directorate of Enforcement (ED) issued a No Objection for compounding the violations. As a result, further adjudication and legal proceedings against the company have come to an end.
The case originated after the ED received credible information and initiated an investigation under FEMA. After completing the investigation, the ED filed a complaint under Section 16 of FEMA before the Adjudicating Authority on September 5, 2024. The complaint pointed out multiple violations related to delays in reporting and compliance with foreign investment regulations.
According to the ED, the violations included late reporting of foreign inward remittances amounting to ₹22.87 crore, delay in filing Form FCGPR after issuing shares involving ₹23.31 crore, and delay in allotment of shares covering ₹7.20 crore. These violations were related to provisions under FEMA 20/2000-RB.
Following this, the Adjudicating Authority issued a show cause notice on September 30, 2024, to the company and its directors or officers who were responsible for managing the company during the period of contravention.
Subsequently, Kakinada Seaports Limited approached the RBI and applied for compounding of the violations as permitted under FEMA. After reviewing the matter and receiving a no-objection from the ED, the RBI agreed to compound the violations.
The RBI compounded the case on payment of a one-time amount of ₹21,68,027, which led to the termination of adjudication proceedings and further litigation under FEMA against the company.
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