Jagathrakshakan, family fined Rs 908 crore under FEMA

Chennai: DMK MP S Jagathrakshakan, his family members and associated Indian entities have been levied a fine of Rs 908 crore under the Foreign Exchange Management Act (FEMA) in a case filed by the Enforcement Directorate (ED) that had earlier passed an order in September 11, 2020, to seize various movable and immovable assets worth Rs 89.19 crore.

In a press release on Wednesday, the ED said Adjudication Proceedings under FEMA were carried out on the case subsequently and it was proved that the alleged violations had taken place, leading the order on Monday for the fine of Rs 908 crore and also the confiscation of the properties.

The ED had filed the complaint under Section 16 of FEMA against Jagathrakshakan, who is a businessman, politician and educationalist based in Chennai and representing the Arakkonam Lok Sabha constituency, and others on December 1, 2021, after the ED’s seizure order of 2020 was set aside by a competent authority on February 2, 2021, the press release said.

The complaint was filed before the Adjudicating Authority charging Jagathrakshkan, family members and a related company with violations of various FEMA provisions, particularly the investment of Rs 42 crore into a shell company incorporated in Singapore in 2017 and the acquisition and transfer, among family members, of Singapore Foreign Shares, the release said.

They were also accused of making an investment of around Rs 9 crore in a Sri Lankan entity in violation of FEMA provisions. Following a thorough review of the alleged violations and the written replies submitted by Jagathrakshakan and others, the violations were established, the release said.