FEMA violations: ED slaps RS 908 crore fine on DMK MP S Jagathrakshakan

The ED’s probe revealed a series of complex financial transactions. The most notable of these was the alleged investment of `42 crore in a Singapore-based shell company in 2017. According to ED, this investment was made without the mandatory approval from the RBI and involved acquisition of 90 lakh foreign shares in violation of FEMA provisions. The ED also found Jagathrakshakan invested `9 crore in a Sri Lankan entity, allegedly violating FEMA.

On September 11, 2020, the ED seized assets worth Rs 89.19 crore held in the name of Jagathrakshakan and his family members.

This seizure was challenged by Jagathrakshakan. On February 3, 2021, the Competent Authority set aside the ED order following which the agency appealed before Appellate Tribunal, where the case is pending. In December 2021, the ED filed a formal complaint before the Adjudicating Authority, detailing the alleged violations. It also requested confiscation of the properties seized in 2020. After examination of the evidence, the Adjudicating Authority on August 26 this year concluded the violations alleged by the ED were substantiated.