ED closes investigation into Epothakon Pharma after RBI’s compounding decision

The Enforcement Directorate (ED) announced the closure of its probe into Epothakon Pharmaceuticals Private Limited following a compounding order from the Reserve Bank of India (RBI). The company settled the matter by paying Rs 40.52 lakh, after which the ED issued a statement confirming the termination of the case.

During the inquiry, the ED identified several lapses: delayed filing of Form ARF for a foreign receipt of roughly Rs 9.91 crore, postponed submission of the FC‑GPR form for about Rs 29.97 crore, and the issuance of shares worth Rs 18.48 lakh before the foreign funds were received. A second tranche of shares amounting to Rs 2.25 crore was allotted more than 180 days after the investment, violating FEMA timelines.

Three share allotments were also executed without prior government approval, constituting another breach. Epothakon applied for compounding under Section 15 of FEMA, received a No Objection Certificate from the ED, and the RBI issued the compounding order on July 6 2026, thereby settling the violations.

The ED clarified its policy that when an infringement is eligible for compounding, meets all stipulated conditions, and faces no outstanding legal challenges, an NOC is granted to encourage voluntary compliance, reduce litigation, and facilitate smoother commercial operations.