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The Enforcement Directorate (ED) has imposed a significant penalty of ₹908 crore on DMK MP S Jagathrakshakan and his family in connection with a case under the Foreign Exchange Management Act (FEMA). In addition to the fine, assets worth ₹89 crore have been confiscated by the agency.
Details of the Case
The ED’s Chennai office conducted an extensive investigation into the financial dealings of S Jagathrakshakan, a Tamil Nadu MP, his family members, and associated Indian entities. The probe revealed substantial violations of FEMA, particularly in relation to foreign investments and property transfers. As a result, properties valued at ₹89.19 crore, which were previously seized under Section 37A of FEMA, have been ordered for confiscation.
In an official statement posted on X (formerly Twitter), the ED confirmed the penalty and confiscation order: “The properties worth ₹89.19 crore which were seized in terms of Section 37A of FEMA were also ordered for confiscation, and a penalty of ₹908 crore is levied vide Adjudication Order dated 26/08/2024.”
Background on S Jagathrakshakan
S Jagathrakshakan, 76, is a prominent politician representing the Arakkonam Lok Sabha constituency on a DMK ticket. Apart from his political career, he is a well-known businessman and the founder of the Chennai-based Accord Group, which has diverse interests in hospitality, pharmaceuticals, and liquor manufacturing. He also owns the Bharath Institute of Higher Education and Research (BIHER).
The Allegations
The case against Jagathrakshakan dates back to December 1, 2021, when the ED filed a complaint under Section 16 of FEMA. The complaint accused the MP, his family members, and a related company of violating various provisions of FEMA. Key allegations included:
- An investment of ₹42 crore in a shell company in Singapore in 2017.
- The acquisition and transfer of Singaporean shares among family members.
- An investment of around ₹9 crore in a Sri Lankan entity.
These transactions raised red flags and led to the seizure of properties on September 11, 2020. After reviewing the violations and considering the written replies submitted by the accused, the ED concluded that the allegations were substantiated.
Conclusion
The ₹908 crore fine and confiscation of assets mark one of the most significant penalties imposed by the ED under FEMA in recent times. This development is likely to have significant implications for S Jagathrakshakan and his family’s business empire as well as his political career.
Sources By Agencies
