CHENNAI: The Chennai zone of Enforcement Directorate has levied a penalty of approximately Rs 908 crore against Former Union Minister and DMK Member of Parliament (MP) S Jagathrakshakan and his family members for alleged violations of the Foreign Exchange Management Act (FEMA), the agency said on Wednesday.
Properties worth Rs 89.19 crore seized under the FEMA were also ordered for confiscation, ED added.
This is an outcome of adjudication proceedings under the Act after careful examination of alleged violations and written replies filed by them, ED said, adding that the violations were clearly proved.
The ED has charged the MP, his family members, and a related company of violating FEMA provisions in an investment of Rs 42 crore in a Singapore based shell company Silver Park international Pte Ltd in 2017 without taking the approval of Reserve Bank of India and acquiring and holding 90 lakh foreign shares.
In another case, ED has also alleged FEMA violations regarding an investment of Rs 9 crore made by the MP into a Sri Lankan entity.
Properties worth Rs 89.19 crore in the form of immovable properties like agricultural lands, plots and houses and movable properties like bank balances and shares were seized by the agency in 2020. However, the seizure order was later set aside by the competent authority in 2021 and ED’s appeal before the appellate tribunal is pending.
After this, ED filed a FEMA complaint under section 16 of the Act charging them for the violations and prayed for confiscation of the properties. A show cause notice was issued against the noticees on December 22, 2021.
Later, Jagathrakshakan and his family members filed a writ petition in the Madras High Court challenging the complaint under section 16 of FEMA when the seizure order based on the same facts was set aside by the competent authority.
On November 30, 2023, the High Court ruled that the order passed by the competent authority on the seizure of assets would not interfere with that of the Adjudicating authority. The division bench of the High Court on July 23, 2024 set aside writ appeals filed by the MP and his family.
After this, the adjudication proceedings under FEMA were completed which also considered written responses given by the MP and his family members. ED said that the allegations were proved and hence the penalty was levied.