ED orders penalty of ₹908 crore on MP Jagathrakshakan for FEMA violations

Enforcement Directorate imposes ₹908 crore penalty on Arakkonam MP S. Jagathrakshakan for FEMA violations, seizing properties worth ₹89.19 crore.

The Enforcement Directorate (ED) has imposed a red a penalty of ₹908 crore  on S. Jagathrakshakan, Arakkonam DMK Member of Parliament, for violations under the Foreign Exchange Management Act (FEMA). The penalty order was passed by the ED on Monday based on the Seizure Order dated September 11, 2020, under Section 37A of FEMA in which various movable and immovable properties held in the name of Jagathrakshakan and his family members, totally valued at ₹89.19 crore, were seized. 

In a press release, the ED said the penalty was levied after the Madras High Court dismissed the writ appeals of Jagathrakshakan through order dated July 23 this year. Earlier the Madras High Court had on November 30 last year refused to intervene in the functioning of the ED which had followed the due process of issuing show cause notices against Jagathrakshakan and his family members on December 22, 2021. 

The ED had charged Jagathrakshakan and his family members for violations of various FEMA provisions, particularly in respect of their investment to the tune of ₹42 crore into a shell company incorporated in Singapore during the year 2017 and acquisition/holding of Singapore foreign shares and its subsequent transfer amongst the family members in defiance of the provisions of FEMA. Also ED had found violations with regard to the investment of around ₹9 crore made into a Sri Lankan entity.