Westbridge Capital Us Advisors, Lp

Allegations: THE ORDER DATED JANUARY 06, 2023 ISSUED BY THE DIRECTORATE OF ENFORCEMENT, SOUTHERN REGIONAL OFFICE, CHENNAI ("ED") ALLEGES THAT THE INVESTMENT BY THE ADVISORY AFFILIATE AND ITS WHOLLY OWNED SUBSIDIARY IN VASAN HEALTHCARE PRIVATE LIMITED ("VASAN") WAS NOT IN COMPLIANCE WITH THE FOREIGN DIRECT INVESTMENT ("FDI") SCHEME UNDER THE FOREIGN EXCHANGE MANAGEMENT ACT, 1999 ("FEMA"), ON CERTAIN GROUNDS, INCLUDING THAT THE SUBSIDIARY WAS NOT REGISTERED WITH THE SECURITIES AND EXCHANGE BOARD OF INDIA AS A FOREIGN VENTURE CAPITAL INVESTOR. THE ADVISORY AFFILIATE VIGOROUSLY DISPUTES THE ORDER ON THE GROUNDS THAT IT IS BASED ON ERRONEOUS ASSUMPTIONS AS TO FACT AND LAW. Status: On Appeal Summary: PURSUANT A SHOW CAUSE NOTICE DATED APRIL 17, 2017 ISSUED BY THE ED, AN ORDER DATED JANUARY 6, 2023 TO PAY INR 826 MILLION (EQUIVALENT TO APPROX. USD 10 MILLION) WAS ISSUED TO THE ADVISORY AFFILIATE AND ITS SUBSIDIARY WITH RESPECT TO THEIR INVESTMENT IN VASAN. THE ADVISORY AFFILIATE AND ITS SUBSIDIARY HAVE, IN THEIR APPEAL, FILED ON MARCH 17, 2023 SUBMITTED WHY THEY BELIEVE THE ORDER IS INCORRECT. THE APPEAL IS NOW PENDING BEFORE THE FEMA APPELLATE TRIBUNAL. THE ADVISORY AFFILIATE HAS ALSO FILED APPLICATIONS FOR A STAY AGAINST THE ORDER OF THE ED AND FOR DISPENSATION OF THE REQUIREMENT TO DEPOSIT THE PENALTY AMOUNT. WHILE THE HEARING AND CONCLUSION OF THE APPEAL MAY TAKE AT LEAST 12 MONTHS, WESTBRIDGE BELIEVES THAT THE LIKELIHOOD OF PENALTIES BEING FINALLY IMPOSED IS REMOTE.

Allegations: THE ORDER DATED JANUARY 06, 2023 ISSUED BY THE DIRECTORATE OF ENFORCEMENT, SOUTHERN REGIONAL OFFICE, CHENNAI ("ED") ALLEGES THAT THE INVESTMENT BY THE ADVISORY AFFILIATE AND ITS WHOLLY OWNED SUBSIDIARY IN VASAN HEALTHCARE PRIVATE LIMITED ("VASAN") WAS NOT IN COMPLIANCE WITH THE FOREIGN DIRECT INVESTMENT ("FDI") SCHEME UNDER THE FOREIGN EXCHANGE MANAGEMENT ACT, 1999 ("FEMA"), ON CERTAIN GROUNDS, INCLUDING THAT THE SUBSIDIARY WAS NOT REGISTERED WITH THE SECURITIES AND EXCHANGE BOARD OF INDIA AS A FOREIGN VENTURE CAPITAL INVESTOR. THE ADVISORY AFFILIATE VIGOROUSLY DISPUTES THE ORDER ON THE GROUNDS THAT IT IS BASED ON ERRONEOUS ASSUMPTIONS AS TO FACT AND LAW. Status: On Appeal Sanction Detail: THE ORDER INCLUDED A MONETARY FINE OF APPROXIMATELY $10,000,000.00. PLEASE SEE RESPONSE TO ITEM 13 BELOW FOR ADDITIONAL DETAILS. Summary: PURSUANT A SHOW CAUSE NOTICE DATED APRIL 17, 2017 ISSUED BY THE ED, AN ORDER DATED JANUARY 6, 2023 TO PAY INR 826 MILLION (EQUIVALENT TO APPROX. USD 10 MILLION) WAS ISSUED TO THE ADVISORY AFFILIATE AND ITS SUBSIDIARY WITH RESPECT TO THEIR INVESTMENT IN VASAN. THE ADVISORY AFFILIATE AND ITS SUBSIDIARY HAVE, IN THEIR APPEAL, FILED ON MARCH 17, 2023 SUBMITTED WHY THEY BELIEVE THE ORDER IS INCORRECT. THE APPEAL IS NOW PENDING BEFORE THE FEMA APPELLATE TRIBUNAL. THE ADVISORY AFFILIATE HAS ALSO FILED APPLICATIONS FOR A STAY AGAINST THE ORDER OF THE ED AND FOR DISPENSATION OF THE REQUIREMENT TO DEPOSIT THE PENALTY AMOUNT. WHILE THE HEARING AND CONCLUSION OF THE APPEAL MAY TAKE AT LEAST 12 MONTHS, WESTBRIDGE BELIEVES THAT THE LIKELIHOOD OF PENALTIES BEING FINALLY IMPOSED IS REMOTE.