SAFEMA Tribunal Quashes ED Penalties Against Lalit Modi; Former IPL Chief Eyes India Return

Former Indian Premier League (IPL) chairman Lalit Modi has secured a major legal victory after an appellate tribunal set aside most of the penalties imposed by the Enforcement Directorate (ED) in a Foreign Exchange Management Act (FEMA) case linked to the 2009 IPL season held in South Africa. The order prompted Modi to announce that he plans to return to India by the end of this year or in early 2027, saying the "chapter is behind me".

The Appellate Tribunal under the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act (SAFEMA) overturned key findings of the ED in the long-running case arising out of the relocation of the 2009 IPL to South Africa. The tournament had been shifted outside India after the Centre expressed its inability to provide security because of the general elections.

How did the case begin?

The ED had initiated proceedings alleging violations of FEMA in relation to overseas remittances and other financial transactions undertaken for organising the 2009 IPL in South Africa. The case centred on the BCCI's transfer of ₹243.45 crore (USD 49.86 million) to Cricket South Africa (CSA) in connection with organising the IPL without obtaining prior approval from the Reserve Bank of India (RBI).

The ED alleged that the remittance violated the Foreign Exchange Management Act (FEMA), leading to adjudication proceedings against the accused persons. It imposed penalties on Lalit Modi, the Board of Control for Cricket in India (BCCI), and several BCCI office-bearers.

The proceedings continued for over 16 years, with the ED maintaining that the remittances made for the tournament amounted to impermissible capital account transactions and that Modi bore responsibility for the alleged violations.

What did the tribunal hold?

The tribunal division bench comprising Chairman Justice Munishwar Nath Bhandari and Member Rajesh Malhotra, in its July 16 order, rejected the ED's principal findings and held that the remittances in question were current account transactions rather than capital account transactions, substantially weakening the foundation of the agency's case. It also concluded that Lalit Modi was not responsible for ensuring FEMA compliance on behalf of the BCCI and did not possess the financial authority that the ED had attributed to him.

As a result, the tribunal quashed most of the penalties imposed on Modi and several former BCCI officials.

However, it did not grant complete relief in the matter. The tribunal upheld findings relating to two violations by the BCCI: remitting an amount higher than what was reflected in its books of accounts and the delay in repatriating ticket sale proceeds to India. While sustaining liability on these counts, it reduced the penalty on the BCCI from Rs 4 crore to Rs 1 crore.

Modi announces return to India

A day after the tribunal's decision, Modi said he intends to return to India after living abroad for more than a decade.

Posting on social media, the former IPL chief said the tribunal's order had brought closure to the matter. He said he would return to India by the end of 2026 or early 2027, adding that while London would remain his home, he now looked forward to visiting India again.

Modi left India in 2010 after coming under investigation in multiple cases relating to his tenure as IPL chairman. Over the years, he has remained in London while contesting various proceedings initiated against him by Indian authorities.