The Enforcement Directorate (ED) has imposed a penalty of Rs 908 crore on Dravida Munnetra Kazhagam (DMK) Member of Parliament (MP) S Jagathrakshakan for violating the Foreign Exchange Management Act (FEMA). The ED also ordered the confiscation of properties worth Rs 89.19 crore, which were seized in September 2020. Jagathrakshakan, who has been representing the Arakkonam Lok Sabha constituency since 2019, was accused of acquiring foreign securities from a Singapore-based company, in violation of Section 4 of the FEMA.
S. Jagathrakshakan: Accused of Violating Foreign Exchange Management Act (FEMA)
Background:
S. Jagathrakshakan is a Member of Parliament (MP) from the Dravida Munnetra Kazhagam (DMK) party. He has been representing the Arakkonam Lok Sabha constituency since 2019.
In September 2020, the Enforcement Directorate (ED) searched Jagathrakshakan's premises and seized properties worth Rs 89.19 crore. The search was conducted as part of an investigation into alleged violations of the Foreign Exchange Management Act (FEMA).
Enforcement Directorate Investigation:
The ED alleged that Jagathrakshakan had acquired foreign securities worth Rs 908 crore from a Singapore-based company in 2018. This transaction was considered a violation of Section 4 of the FEMA, which prohibits the acquisition of foreign securities by Indian citizens without prior approval.
The ED conducted a detailed investigation and concluded that Jagathrakshakan had knowingly and willfully violated the FEMA. It imposed a penalty of Rs 908 crore on him and ordered the confiscation of the seized properties.
Confiscation of Properties:
The properties seized by the ED included land, residential buildings, and commercial complexes. The ED valued these properties at Rs 89.19 crore. The confiscation of these properties was a significant financial setback for Jagathrakshakan.
Legal Consequences:
The ED's penalty and confiscation order is a major legal blow to Jagathrakshakan. If he fails to pay the penalty, he could face legal action and imprisonment. Additionally, the confiscation of his properties will affect his family and close associates.
Top 5 FAQs and Answers:
1. What is the Foreign Exchange Management Act (FEMA)?
A: FEMA is a law enacted by the Indian government to regulate the flow of foreign exchange in the country. It prohibits the acquisition of foreign securities by Indian citizens without prior approval.
2. Why was Jagathrakshakan accused of violating FEMA?
A: Jagathrakshakan was accused of acquiring foreign securities worth Rs 908 crore from a Singapore-based company without prior approval from the Reserve Bank of India (RBI).
3. What are the penalties for violating FEMA?
A: The penalties for violating FEMA can include fines, imprisonment, and confiscation of properties.
4. What are the consequences of the ED's order against Jagathrakshakan?
A: The ED's order could result in Jagathrakshakan paying a heavy penalty, losing his properties, and facing legal action.
5. What does this case mean for other politicians?
A: This case sends a strong message to politicians and other public figures that they are not above the law and must adhere to the country's foreign exchange regulations.
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