The Enforcement Directorate has issued a show-cause notice to singer Rahat Fateh Ali Khan and his manager Maroof Ali, both Pakistani nationals, for allegedly violating foreign exchange rules involving Rs 2.61 crore, officials said on Wednesday.
The notice, issued on Monday, has been served in a case that pertains to the seizure of undeclared US dollars from Khan at the Delhi airport in 2011. Khan and Ali both live in Pakistan.
"The show-cause notice has been served to Khan and Ali for violation of foreign exchange rules," an ED official said.
An ED statement said that Khan had engaged the late Chitresh Shrivastava (elder brother of Bollywood singer Aadesh Shrivastava) as global event manager, who used to collect payments on his behalf for various shows performed by him in India.
Major part of these payments were received in cash. This was illegally converted into US dollars through unauthorized sources by Shrivastava and the same was handed over to Khan, the ED said.
It said that Khan had illegally received $340,000 in India through unauthorized sources with the help of his event manager and with the support of his manager he had illegally taken out $225,000 out of India.
The ED has registered a case against Khan and Ali under the Foreign Exchange Management Act (FEMA) for illegal dealings in foreign exchange and also some Indians for their involvement in supplying foreign currency unauthorizedly. This followed a case filed by the Directorate of Revenue Intelligence (DRI).
On February 13, 2011, Khan and Ali were going to attend a music programme from India to Dubai in the United Arab Emirates.
Khan, a popular Bollywood playback singer, who was in Delhi to perform at an Indo-Pakistan peace initiative, was to board an Emirates flight to Karachi via Dubai with his entourage of 14 persons.
Khan and Ali were detained at the Indira Gandhi International Airport for travelling with undeclared currency to the tune of $300,000 (around Rs 2.10 crore) along with Pakistani and Indian currency, the ED official said.
The DRI then said that Khan had not declared the amount to the immigration authorities.
As per rules, a foreign national cannot carry more than $5,000 in cash and $5,000 in other instruments. In the event he has more cash, he has to declare it to the Customs Department.
Khan was unable to give a proper response regarding the source of the money and he also did not show any relevant documents for the same.
The ED had earlier questioned Khan a number of times.
A case under FEMA is not considered a criminal case. Even the accused is not arrested but if the charges are proven, then the agency can impose heavy fines of up to three hundred times of the said amount.
The 45-year-old nephew of Pakistani singing legend late Ustad Nusrat Fateh Ali Khan was earlier also involved in a controversy when organisers of a concert in Gurugram filed a police complaint against him in July 2010 for his failure to turn up for a show.