TBO Tek receives Rs 22.216 crore FEMA penalty in October

TBO Tek Limited received an October 16, 2026 Enforcement Directorate adjudication order imposing a Rs 22.216 crore penalty on the company and Rs 2.468 crore on each joint managing director. TBO Tek has made no adjustment to its financial results for the six months ended September 30, 2026 while it prepares an appeal.

What did the FEMA order impose on TBO Tek?

The order imposed a Rs 22.216 crore penalty on TBO Tek and Rs 2.468 crore on each joint managing director. The Special Director (Adjudication), Directorate of Enforcement, passed the order on October 16, 2026, and TBO Tek said it received it on October 21, 2026.

The order concerns alleged contraventions under the Foreign Exchange Management Act, 1999, or FEMA. TBO Tek disclosed the matter in financial results approved by its board on November 2, 2026 for the quarter and six months ended September 30, 2026. The standalone statutory auditors issued an unmodified conclusion on those results.

The company had previously received summons under Sections 37(1) and 37(3) of FEMA seeking information, including transactions involving persons, companies and travel agents outside India. TBO Tek said it responded to those summons before the later adjudication proceedings resulted in the October 2026 order.

What FEMA transactions did the Enforcement Directorate allege?

The Enforcement Directorate alleged that TBO Tek permitted foreign travel agents to book airline tickets and accepted Indian-rupee payments from parties other than those to whom services were rendered. The complaint dated September 13, 2023 alleged a breach of Section 3(c), read with Section 42(1), of FEMA involving Rs 49.37 crore.

TBO Tek identified total alleged contraventions of Rs 71.225 crore when transactions with other customers were included. The company’s disclosure states that Section 13 of FEMA allows a maximum penalty of three times the amount involved in a contravention, but it does not state that the October 2026 penalties were calculated at that maximum.

The FEMA process followed an Enforcement Directorate search at one of TBO Tek’s Gurgaon offices on May 13, 2022. According to the company, the search examined certain TBO Portal transactions by third-party individuals and their associated companies or associates, who had purportedly committed money-laundering offences; investigators collected email data from some officials and financial-transaction information involving certain travel buyers.

TBO Tek said its legal adviser reviewed a complaint or chargesheet filed in the Special Central Bureau of Investigation court in Kolkata regarding the alleged money-laundering matter. On that legal review, neither TBO Tek nor its directors or employees had been charged with an offence. The company distinguished that earlier matter from the FEMA adjudication order dated October 16, 2026.

Why has TBO Tek not adjusted its accounts for the penalty?

TBO Tek has made no adjustment to the financial results for the period ended September 30, 2026 because it is in the process of filing an appeal. Based on legal advice, management said the prospects of success are high and that the penalties are unlikely to be sustained, which is management’s stated view rather than an appellate decision.

The company had sought to compound the matter with the Reserve Bank of India, or RBI, during the year ended March 31, 2024. The RBI directed TBO Tek to regularise the transactions through post-facto approval or by unwinding them; the Foreign Exchange Department did not accept the post-facto approval request communicated on April 7, 2025, or a refiled request communicated on September 2, 2025.

The adjudication proceedings advanced after TBO Tek received a July 25, 2025 letter from Enforcement Directorate Adjudication on September 11, 2025. TBO Tek submitted written submissions on November 3, 2025, and said the case was heard on April 2, 2026 without additional requirements being raised before the October order was issued.

S.R. Batliboi & Co. LLP drew attention to the uncertainty in an emphasis-of-matter paragraph in its review of TBO Tek’s unaudited consolidated results for the quarter and six months ended September 30, 2026. The auditor said its conclusion was not modified in respect of the FEMA matter, while specifically identifying the unresolved outcome of the adjudication order.

How does the company penalty compare with TBO Tek's reported position?

The Rs 22.216 crore company penalty was not included as an adjustment in TBO Tek’s standalone September 30, 2026 results. The standalone balance sheet reported total assets of Rs 1,664.474 crore and total equity of Rs 914.591 crore at that date, compared with Rs 1,448.388 crore and Rs 864.346 crore respectively at March 31, 2026.

Cash and cash equivalents increased by Rs 76.828 crore from March 31, 2026 to September 30, 2026. In the six months ended September 30, 2026, TBO Tek reported operating cash inflow of Rs 129.707 crore, compared with operating cash outflow of Rs 83.143 crore in the corresponding six months of 2025.

Current liabilities increased by Rs 168.80 crore over the six months, from Rs 480.703 crore at March 31, 2026 to Rs 649.503 crore at September 30, 2026. Trade payables other than dues to micro and small enterprises rose to Rs 485.836 crore from Rs 323.395 crore, while the company maintained that no FEMA-related adjustment was warranted pending its appeal.

The reported standalone statement of cash flows also showed net cash increased by Rs 76.828 crore in the six months ended September 30, 2026, against a decrease of Rs 195.247 crore in the comparable 2025 period. Those movements are reported cash-flow measures and do not determine the eventual outcome of the appeal or the accounting treatment that may follow it.

Conclusion

The October 2026 order creates a disclosed Rs 22.216 crore FEMA penalty for TBO Tek and Rs 2.468 crore penalties for each joint managing director. The order stems from allegations involving Indian-rupee payments for airline-ticket booking services, while TBO Tek has said it will challenge the outcome and has not adjusted its September 2026 financial results.

The next disclosed step is TBO Tek’s planned appeal, for which the filing does not give a hearing date or decision timetable. Subsequent financial results may show whether the company changes its no-adjustment position, while the consolidated auditor’s emphasis-of-matter paragraph means the adjudication outcome remains an identified uncertainty.