News Tamil Nadu

Why The ED Slapped ₹908 Crore Penalty On DMK MP Jagathrakshakan, Family & Seized Properties Worth ₹89 Crore

August 29, 2024
The Commune

The Enforcement Directorate (ED) has imposed a hefty fine of ₹908 crore on Arakkonam DMK MP S. Jagathrakshakan and his family members for breaching the Foreign Exchange Management Act (FEMA). This substantial penalty comes as part of an ongoing investigation that also led to the seizure of various movable and immovable assets, amounting to ₹89.19 crore, held in the names of Jagathrakshakan and his relatives.

The ED announced on 28 August 2024 that after a thorough review of the violations and the responses provided by the involved parties, it was determined that the infractions were well-substantiated. Consequently, Jagathrakshakan and his family were penalized for each identified violation.

ED via its official X account stated, “The properties worth Rs. 89.19 Crore which was seized in terms of Section 37A of FEMA was also ordered for confiscation, and penalty of Rs.908 Crore (approx.) is levied vide Adjudication Order passed on 26/08/2024.”

The case against Jagathrakshakan, his family, and an associated company began in 2021, focusing on breaches related to foreign exchange regulations. The allegations include an investment of ₹42 crore into a Singapore-based shell company in 2017, the acquisition and transfer of Singaporean shares among family members, and an additional investment of ₹9 crore into a Sri Lankan entity. Despite receiving show cause notices and the opportunity for a personal hearing, which their legal counsel represented, the Madras High Court dismissed their writ petitions in July 2024.

Who Is Jagathrakshakan?

S. Jagathrakshakan, an Indian businessman and politician serving as the current member of the Lok Sabha representing the Arakkonam constituency in Tamil Nadu, a position he has held three times since 1999. Jagathrakshakan was also the Minister of State for Commerce and Industry from November 2012 to March 2013. In addition to his political career, he is the chairman of Shree Balaji Medical College and Hospital and owns Dr. Rela Hospital and Institute. He has authored 30 books, including one that Mother Teresa released.

Jagathrakshakan’s political career includes a tenure in the Tamil Nadu state assembly in 1980 and election to the Lok Sabha in 1984 with the Anna Dravida Munnetra Kazhagam (ADMK) party. He also led the ADMK parliamentary party from 1985 to 1989. He won the Arakkonam Lok Sabha seat in the 1999 and 2009 elections under the Dravida Munnetra Kazhagam (DMK) party. In 2004, he founded the Veera Vanniyar Peravai, a caste-based party renamed Jananayaga Munnetra Kazhagam and merged with the DMK in 2009.

Accusations Against DMK MP Jagathrakshakan

Jagathrakshakan has faced several controversies, including allegations related to the Coal Scam in March 2012, where he was accused of leveraging his political influence for illegal coal allocations in 2007. His asset value reportedly soared from ₹5.9 crore in 2009 to ₹78 crore in 2014, marking the highest percentage increase in assets among central cabinet ministers. Additionally, a sting operation in June 2009 revealed that one of his medical colleges was charging ₹20 lakh for MBBS admission. Recently, a short video clip of a boy went viral confirming the allegation wherein he revealed that he paid ₹25 lakhs to secure a seat for pursuing an MBBS degree in DMK MP Jagathrakshakan-owned medical college. He also added that entire course expenses at the medical college owned by DMK leader would tally up to ₹1.5 crores, which economically poor students cannot afford.

Further reports suggest that Jagathrakshakan may have misused his authority during his tenure as an MLA, MP, and minister. His influence reportedly extends to the supply of liquor to TASMAC, with 85-90% of the liquor supplied coming from his distilleries irrespective of whether the DMK or AIADMK is in power. His empire also encompasses hospitals such as Anusha Hospital, Shri Royal Blue Hospital, Jagath Super Speciality Hospital, and JR Super Speciality Hospital, pharmaceutical manufacturing firms for cancer drugs, cement factories, a sugar mill, and even a rumoured (in the works) private airline venture.

Current ED Focus – Silver Park International Pte. Ltd

Investigations revealed that on 15 June 2017, Jagathrakshakan and his son Sundeep Aanand had subscribed to 70,00,000 shares and 30,00,000 shares respectively (valued at Singapore $ 1/- per share) of Silver Park International Pte. Ltd., Singapore, without obtaining the approval of the Reserve Bank of India. The company is registered in Singapore as a limited exempt private limited company under the Companies Act. The memorandum of association is provided below.

A sting operation revealed that funds flowing to Silver Park International were linked to the coal scam exposed in 2012. The scam reportedly began in 2007 with creating and allocating power projects to JR Power Generations, a company allegedly founded by Jagathrakshakan, which had no prior experience. Another company, KSK Energy Ventures, based in Mauritius, acquired 51% of shares, mirroring Jagathrakshakan’s JR Power, again creating Accord Generation Corporation, which obtained a license but did not execute the project. According to the sting operators, creating and selling companies with licenses is more profitable for politicians than receiving bribes for the licenses themselves. In 2016, 99.86% of the funds were sold to KSK Energy Ventures. This transaction highlights a contemporary method of bribery employed by DMK politicians.

They conclude that black money parked in Mauritius is systematically brought back and converted into legitimate funds through companies acquiring shares, all in plain sight, they allege.

Jagathrakshakan and his family have various business interests, including oil refineries, educational institutions, and Elite Distilleries Pvt Ltd. The DMK MP, who controls the Singapore company Silver Park International Pvt Ltd, along with the Oman Oil Ministry, owned by India’s Accord Group, had agreed to build a $3.9 billion, 200,000 barrel per day oil refinery next to the Chinese-controlled Hambantota port.

Three of the four directors in Silver Park International, which is registered with Singapore’s national regulator Accounting and Corporate Regulatory Authority (ACRA), are Jagathrakshakan Sundeep Anand (son), Jagathrakshakan Sri Nisha (daughter) and Jagathrakshakan Anusuya (wife). The investigation into his mega oil refinery deal has also revealed that he has embarrassed the Sri Lankan government when reports emerged that Oman’s Oil Ministry denied being part of a $3.9 billion plan.

Jagathrakshakan’s Empire

Jagathrakshakan’s vast portfolio includes over 50 educational institutions including Bharath University, Jagath University, Bharath Medical College, Balaji Medical College, Tagore Medical College, and numerous others, over 6 star hotels such as Accord Hotel and Kaldan Samudhra – a Rajasthan-themed luxury hotel in ECR, coal mines, power generation stations, distilleries such as Elite Distilleries, Fortune Distilleries, and AM Breweries, and a myriad of other businesses. Three of these medical colleges constituted 950 medical seats. All these educational institutions allow him a chance to connect with politicians, industrialists, and people in power. Here is a list of some of the properties and businesses Jagatrakshakan and his family own:

Universities

  1. Bharath University – built on an area spanning 350 acres in Chennai
  2. Jagath University – Dehradun

Medical Colleges

  1. Bharath Medical College and Hospital (BMCH), Chennai
  2. Sree Balaji College of Nursing, Chennai
  3. Sree Balaji Medical College and Hospital (SBMCH), Chennai
  4. Sree Balaji College of Physiotherapy
  5. Sri Lakshmi Narayana Institute of Medical Sciences (SLIMS), Puducherry
  6. Tagore Medical College, Chennai
  7. Bharat Dental College, Chennai
  8. Tagore Dental College, Chennai

Engineering Colleges

  1. Bharath Institute of Science and Technology, Chennai
  2. Balaji Institute of Engineering and Technology, Chennai
  3. Tagore Engineering College, Chennai
  4. Jerusalem Engineering College, Chennai
  5. Lakshmi Ammal Engineering College, Chennai
  6. Sri Ramanujar Engineering College, Chennai
  7. Bharath Institute of Law, Chennai
  8. Bharath Agriculture College, Chennai
  9. Bharath School of Architecture, Chennai
  10. Bharath School of Arts and Science, Chennai
  11. Tagore College Of Arts And Science, Chennai
  12. Balaji Women’s Arts and Science College, Chennai
  13. Bharath Institute of Management, Chennai
  14. Bharath Polytechnic College, Chennai
  15. Sri Balaji Polytechnic College, Chennai
  16. Lakshmi Ammal Polytechnic College, Chennai
  17. Bharath Institute of Catering Technology & Hotel Management, Chennai
  18. Sree Balaji College Of Hotel Management & Catering, Chennai
  19. Bharath College of Nursing, Chennai
  20. Sree Balaji College of Nursing, Chennai
  21. Tagore Nursing College, Chennai
  22. Bharath School of Physiotherapy, Chennai
  23. Sree Balaji College of Physiotherapy, Chennai
  24. Tagore College of Physiotherapy
  25. Balaji College of Pharmacy, Chennai
  26. Tagore College Of Pharmacy, Chennai
  27. Bharath Institute of Education
  28. Balaji College of Education, Chennai
  29. Balaji Teacher Training Institute
  30. Kilton Teacher Training Institute, Chennai
  31. Lakshmi Ammal Memorial Matriculation HSS, Chennai
  32. Kilton Matriculation HSS, Chennai
  33. Bharath Vidyaashram, Chennai (CBSE)
  34. Bharath Vidyaashram, Puducherry (CBSE)
  35. Madras Vocational Training Institute, Chennai
  36. Tagore Institute of Allied Health Sciences
  37. Bharath College of Allied Health Sciences

Five-Star Hotels

  1. The Accord Metropolitan, Chennai
  2. The Accord Metropolitan Ltd, Puducherry
  3. Accord Highlands, Ooty
  4. J Hotels Pvt Ltd, Chennai
  5. J Hotels Pvt Ltd, Puducherry
  6. JAM Hotels & Resorts, Bengaluru
  7. Kalden Samudra – Resort in ECR

Breweries/Distilleries

  1. Elite Distilleries, Chennai
  2. AM Breweries, Chennai
  3. Fortune Distilleries, Goa

Coal Companies

  1. JR Coal Mines, Madhya Pradesh
  2. JR Coal Mines, Odisha

Power Generation Companies

  1. JR Power Gen Pvt Ltd, Madhya Pradesh
  2. JR Power Gen Pvt Ltd, Odisha
  3. Accord Energy Corporation India Pvt Ltd
  4. KSK Companies – Mines & Electricity

Investments Abroad

  1. Oil company worth 23000 crores in Sri Lanka
  2. Silver Park International Pvt Ltd, an investment vehicle owned by Accord Group
  3. Dr Rela Institute & Medical Centre, Chennai
  4. JS Hospital

Factories near Chennai, Thiruvallur, Kanchipuram

  1. Chromeleather.com Ltd
  2. Jagath Enterprises Limited
  3. Accord Life Spec Private Limited
  4. Accord Mineral Water
  5. Accord Agro Spirits
  6. Accord Platinum Tyres
  7. Accord Manpower and Securities India Pvt Ltd
  8. Ramify Solutions Pvt Ltd
  9. JR Cold Kingdom Pvt Ltd

Wedding Halls

  1. Samikannu Gounder Lakshmi Ammal Thirumana Maaligai Villupuram

It is alleged that in the Chromepet area of Chennai, 100 acres of land where a company named Chrome used to function is said to have been bought by Jagathrakshakan, where most of the colleges have been built. He is also said to own 56 houses/properties in Chennai.

The first part of the DMK Files released by the Tamil Nadu BJP President K. Annamalai detailed the assets owned by DMK MP S. Jagathrakshakan including JR Super Speciality Hospital (₹444.79 cr), Grand Accord Pvt ltd (₹4.06 cr), Accord Energy Corporation (₹343.02 cr), JAM hotel and resorts (₹66.81 cr), Sri Lakshmi Ammal Educational Trust (₹1239.80 cr) and others.

This is not the first time Jagathrakshakan‘s name figured is a scam. Under the UPA regime, his name was prominent in the Coal scam that shook the then-Manmohan Singh Government. He is also believed to be a significant funding source for DMK’s election campaigns. In the 2019 Indian general election, he was re-elected to the Lok Sabha from the Arakkonam constituency as a member of the DMK and is currently continuing as an MP.

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