Karnataka HC directs Google India, executives to furnish 50% of FEMA penalties as bank guarantee
Bengaluru (PTI): The Karnataka High Court has directed Google India and three of its senior executives to deposit 50 per cent of the penalties imposed, for alleged Foreign Exchange Management Act (FEMA) violations, as bank guarantees.
The Enforcement Directorate (ED) had earlier levied a penalty of Rs 5 crore on Google India, along with a combined penalty of Rs 45 lakh on the three officials.
The case pertains to alleged violations of section 6(3)(d) of FEMA, involving transactions worth Rs 364 crore.
According to the ED, the violations relate to payments made by Google India to Google Ireland as distributor fees and for the acquisition of equipment from Google US.
The agency contended that Rs 363 crore, payable to Google Ireland, remained unpaid for over four years until May 2014, while payment for Rs 1 crore worth equipment sourced from Google US remained unsettled for more than seven years until January 2014.
The ED classified these as commercial loans, which would require prior approval from the Reserve Bank of India (RBI).
Google India, however, contested these allegations, asserting that the transactions in question were not foreign exchange borrowings.
The company emphasized that there were no loan agreements, deferred payments, or interest involved, and claimed adherence to an RBI circular issued on July 1, 2014.
Earlier, on January 11, 2019, the Appellate Tribunal for FEMA in Delhi had granted a stay on the penalties, citing that Google India's appeal appeared to have merit. The ED subsequently filed second appeals challenging the stay.
A division bench comprising Justices V Kameshwar Rao and S Rachaiah observed that the tribunal's stay was based only on a preliminary view.
They have now instructed Google India and the concerned officials to provide bank guarantees for half the total penalties within two weeks.
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Iran reimposes restrictions on Strait of Hormuz, accusing US of violating deal to reopen it
Cairo (AP): Iran swiftly reversed course on reopening the Strait of Hormuz, reimposing restrictions on the critical waterway on Saturday after the US said it would not end its blockade of Iran-linked shipping.
Iran's joint military command said on Saturday that “control of the Strait of Hormuz has returned to its previous state ... under strict management and control of the armed forces.” It warned that it would continue to block transit through the strait as long as the US blockade of Iranian ports remained in effect.
The announcement came the morning after US President Donald Trump said that even after Iran announced the strait's reopening on Friday, the American blockade “will remain in full force” until Tehran reaches a deal with the US, including on its nuclear programme.
The conflict over the chokepoint threatened to deepen the energy crisis roiling the global economy after oil prices began to fall again on Friday on hopes the US and Iran were drawing closer to an agreement. Roughly one-fifth of the world's oil passes through the strait, and further limits would squeeze already constrained supply, driving prices higher once again.
Control over the strait has proven to be one of Iran's main points of leverage and prompted the United States to deploy forces and initiate a blockade on Iranian ports as part of an effort to force Iran to accept a Pakistan-brokered ceasefire to end almost seven weeks of war that has raged between Israel, the US and Iran.
Iran said it fully reopened the Strait of Hormuz to commercial vessels after a 10-day truce was announced between Israel and the Iranian-backed Hezbollah militant group in Lebanon. But after Trump said the blockade would continue, top Iranian officials said his announcement violated last week's ceasefire agreement between Iran and the US and warned the strait would not stay open if the US blockade remained in effect.
A data firm, Kpler, said movement through the strait remained confined to corridors requiring Iran's approval.
US forces have sent 21 ships back to Iran since the blockade began on Monday, US Central Command said on X.
Truce in Lebanon could help US-Iran peace efforts
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The ceasefire in Lebanon could clear one major obstacle to an agreement. But it was unclear to what extent Hezbollah would abide by a deal it did not play a role in negotiating, and which will leave Israeli troops occupying a stretch of southern Lebanon.
Trump said in another post that Israel is “prohibited” by the US from further strikes on Lebanon and that “enough is enough” in the Israel-Hezbollah war.
The State Department said the prohibition applies only to offensive attacks and not to actions taken in self-defence.
Shortly before Trump's post, Israeli Prime Minister Benjamin Netanyahu said Israel agreed to the ceasefire in Lebanon “at the request of my friend President Trump,” but that the campaign against Hezbollah is not complete.
He claimed Israel had destroyed about 90 per cent of Hezbollah's missile and rocket stockpiles and added that Israeli forces “have not finished yet” with the dismantling of the group.
In Beirut, displaced families began moving toward southern Lebanon and Beirut's southern suburbs despite warnings by officials not to return to their homes until it became clear whether the ceasefire would hold.
The Lebanese army and UN peacekeepers in southern Lebanon reported sporadic artillery shelling in some parts of southern Lebanon in the hours after the ceasefire took effect.
An end to Israel's war with Hezbollah was a key demand of Iranian negotiators, who previously accused Israel of breaking last week's ceasefire with strikes on Lebanon. Israel had said that the deal did not cover Lebanon.
The fighting has killed at least 3,000 people in Iran, more than 2,290 in Lebanon, 23 in Israel and more than a dozen in Gulf Arab states. Thirteen US service members have also been killed.
