Rs 908 Crore Penalty On DMK MP In Foreign Exchange Violation Case

Five-time DMK MP and former Union Minister S Jagathrakshagan faces a Rs 908 crore penalty in a case of violation of foreign exchange rules. The Enforcement Directorate (ED) has said that following an investigation against Mr Jagathrakshagan, properties worth Rs 89 crore were seized and a penalty of Rs 908 crore levied.

The 76-year-old DMK leader is an MP from Arakkonam in Tamil Nadu and owns a chain of colleges and hospitals.

"ED, Chennai had conducted an investigation under FEMA (Foreign Exchange Management Act) against Jagathrakshakan, a businessman from Tamil Nadu and Member of Parliament, his family members and a related Indian entity.

The properties worth Rs 89.19 Crore which were seized in terms of Section 37A of FEMA were also ordered for confiscation, and a penalty of Rs.908 Crore (approx.) is levied vide Adjudication Order passed on 26/08/2024," the central agency has said in a post on X.

The ED has said in the past that Mr Jagathrakshagan and his son Sundeep Aanand had subscribed to 70,00,000 shares and 20,00,000 shares, respectively, of M/s. Silver Park International Pte. Ltd., Singapore "without obtaining the approval of the Reserve Bank of India".

A search at his premises had found Rs 20 crore unaccounted cash, including Rs 5 crore from one of his homes.

Ordering the seizure of properties worth Rs 89.19 crore, the central agency had said this was equivalent to the value of "illegally acquired, held and transferred foreign security in a Singapore-based company in contravention of the FEMA".

The illegally acquired shares, the ED said, were transferred by S Jagathrakshakan to his family members in violation of the FEMA.

According to Section 37A of FEMA, if any foreign exchange, foreign security or any immovable property situated outside India is suspected to have been held in contravention of Section 4 of the FEMA, the Enforcement Directorate is empowered to seize value equivalent, situated within India, of such foreign exchange, foreign security or immovable property.

The former minister and the ruling DMK are yet to respond.