FEMA Focus is a new feature where the authors will cover important
changes in FEMA with brief analysis. This first one covers important
compounding orders with a short analysis.
An analysis of some interesting compounding orders
passed by Reserve Bank of India in April and May 2018 and uploaded on the
website1are given below.
Investment (FDI) compounding orders
A. Shri Harsha Chigurupati
Date of order:
13th April 2018
Regulation: FEMA 20/2000 Foreign Exchange
Management (Transfer or Issue of Security by a Person Resident Outside India)
Regulations, 2000 (FEMA 20)
of shares of an Indian company from NRI to another foreign company which was
not permissible under earlier FDI Regulations
-The applicant, an NRI,
held 9999 shares of Chigurupati Technologies Private Limited, an Indian Company
(ICO). Shares of ICO were allotted to the applicant, as a promoter and Director
when he was resident in India. Applicant since then became NRI.
shares to non-resident company (FCO) without prior approval of Reserve Bank of