DMK MP S Jagathrakshakan slapped with Rs 908 crore fine for FEMA violations
A penalty of Rs 908 crore has been slapped on DMK MP S Jagathrakshakan and his family members by the Enforcement Directorate (ED).
The whopping penalty has been slapped in a case relating to the violation of Foreign Exchange Management Act (FEMA).
The agency said that the investigation into the case also resulted in the seizure of various movable and immovable properties that were held in the name of Jagathrakshakan and his family members, which are valued at Rs 89.19 crore.
“Upon careful examination of the alleged violations by the Noticees vis-à-vis the written replies filed by the Noticees, it was found that the alleged violations were clearly proved. In conclusion, penalty was levied with respect to each of the alleged violations. The properties worth Rs 89.19 crore which was seized in terms of Section 37A of FEMA was also ordered for confiscation, and penalty of Rs.908 crore (approx.) is levied vide Adjudication Order dated 26/08/2024,” said the agency on Wednesday.
The FEMA complaint was filed by ED against Jagathrakshakan, his family, and related company in 2021, charging them for violations of the foreign exchange provisions. These violations pertained to their investment to the tune of Rs 42 crore into a shell company incorporated in Singapore during 2017, and acquisition of Singapore foreign shares and its subsequent transfer among the family members in defiance of FEMA extant provisions. The penalty also took into account the investment of Rs 9 crore that noticees made into a Sri Lankan entity.
The ED sent them show cause notices, providing them an opportunity for personal hearing, which was attended by their counsel. Individual writ petitions were filed in the Madras High Court. The writ petitions were eventually dismissed in July 2024.