ED levies penalty of Rs 908 crore on DMK MP for FEMA violation in Tamil Nadu

The ED, which is also investigating cases against other DMK leaders like K Ponmudy, Anitha R Radhakrishnan, and Senthil Balaji, said on Wednesday that it has confiscated properties worth Rs 89.19 crore belonging to S Jagathrakshakan, whose business interests range from hotels to hospitals to educational institutions across India and abroad.

Chennai: In an embarrassment to the ruling DMK, the Enforcement Directorate (ED) has slapped a fine of Rs 908 crore on party MP and former Union Minister S Jagathrakshakan and his family members in connection with violations under the Foreign Exchange Management Act (FEMA).

The ED, which is also investigating cases against other DMK leaders like K Ponmudy, Anitha R Radhakrishnan, and Senthil Balaji, said on Wednesday that it has confiscated properties worth Rs 89.19 crore belonging to Jagathrakshakan, whose business interests range from hotels to hospitals to educational institutions across India and abroad.

Jagathrakshakan, a loyalist of late M G Ramachandran, joined the DMK in 1999 after having been associated with R M Veerappan, the long-time manager of the matinee idol. A five-time MP from Arakkonam in north Tamil Nadu, Jagathrakshakan is one of the influential leaders of the DMK and served as the Union Minister of State under the UPA-II regime.

ED initiated a probe under the FEMA in 2020 against the MP, his family members and a related Indian entity owned by them and passed a seizure order in September 2020 for various movable and immovable properties valued at Rs 89.19 crore.

Jagathrakshakan, his family members and the related company were charged for various FEMA violations, particularly in respect to their investment to the tune of Rs 42 crore in a shell company incorporated in Singapore in 2017, acquisition of shares in Singapore, and an investment of around Rs 9 crore made into a Sri Lankan entity.

After due process, the Adjudication Proceedings under FEMA were completed after following due process of law. “…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 a penalty of Rs 908 crore is levied,” the ED said.

Jagathrakshakan is also under the radar of the Income Tax department which had searched premises belonging to him and his family in 2022.

The action by the ED comes weeks after it acted against Ponmudy’s son and former MP Gautam Sigamani in connection with a mining case. The DMK’s legal troubles aren’t only in the form of ED cases against its leaders with the Madras High Court ordering two senior ministers, K K S S R Ramachandran, and Thangam Thennarasu, to stand trial once again in disproportionate assets (DA) cases in which they were discharged by a special court.