In April 2023, Tamil Nadu Bharatiya Janata Party Chief K. Annamalai released the first installment of the DMK Files, shedding light on the alleged wealth amassed by Dravida Munnetra Kazhagam (DMK) leaders, amounting to a staggering ₹1,34,317 crores.
The initial disclosure in the DMK Files centred on DMK MP Jagathrakshakan, unveiling what is claimed to be wealth amounting to ₹50,208 Crores, along with a detailed list of companies allegedly owned by him and his family members. The DMK Files exposé has gained credibility after the Income Tax Department conducted raids on Jagathrakshakan and the businesses linked to him, subsequently releasing a list of purported irregularities.
The IT department conducted sweeping raids at nearly 40 different locations associated with former Union Minister and DMK MP Jagathrakshakan, since 5 October 2023.
The IT Department released a press note on 18 October 2023; it said:
“Income Tax Department conducted search & seizure action in the cases of two groups, primarily running educational institutions engaged in professional courses, on 05.10.2023. These groups are also carrying out other businesses such as distillery. pharmaceuticals, hospitals, and hotels, etc. About 100 premises were covered during the search action in Tamil Nadu and Puducherry.
A large number of incriminating evidences in the form of loose sheets, hard copy of documents, and digital data have been found and seized. The modus-operandi of tax evasion detected in running such educational institutions includes concealment of fee receipts, bogus claim of disbursement of scholarships, etc.
Large scale evidences about receipt of fee which are unrecorded in the books of account and claim of non-genuine disbursement of scholarships have been seized. The preliminary analysis, so far, has resulted in collecting evidences for such unaccounted fee receipts of more than ₹400 crore and incorrect claim of disbursement of scholarship to the tune of ₹25 crore. In one of the groups, seized evidence indicates that trust was utilizing the services of agents for garnering students, for which unaccounted commission payment of about ₹25 crore has been made.
In the distillery business run by one of the groups, it has been found that bogus expenditure has been claimed for about ₹500 crore towards purchase of inputs such as, bottles, flavours, Extra Neutral Alcohol and freight charges, etc. Such purchases are not corroborated with purchase invoices or entries in stock registers. Several evidences have been recovered showing that cheques have been issued to various non-existent entities and the same have been received back in the form of cash for making unaccounted investments and for other expenditure which are not allowable as business expenses.
The seized documents suggest that amount exceeding ₹300 crore has been diverted from trusts either for personal expenses of the trustees or for deployment in diverse businesses. It includes payments made by one of the groups for acquiring an industrial entity in Andhra Pradesh.
So far the searched have resulted in seizure of unaccounted cash amounting to ₹32 crore and gold bullion of ₹28 crore thereby aggregating to ₹60 crore.”
Tamil Nadu BJP Chief K Annamalai enumerated the findings from the press release and also added that the expose stands vindicated with this.
- Unaccounted Fee Receipts: It revealed unaccounted fee receipts exceeding ₹400 crores in a medical college reportedly run by Thiru Jagath Rakshakan.
- Unaccounted Commission Payments: Allegations of unaccounted commission payments in the distribution of scholarships, with an estimated value of ₹25 crore through his trust.
- Bogus Expenditure Claims: The Distillery owned by Thiru Jagath Rakshakan is alleged to have falsely claimed expenses of approximately ₹500 crore for the purchase of inputs.
- Cheques Issued to Non-Existent Entities: The investigation uncovered instances where cheques were purportedly issued to non-existent entities, and subsequently returned in the form of cash for what appears to be unrecorded investments.
- Trust Diversion: It is claimed that a substantial ₹300 crore has been diverted from trusts, ostensibly for personal expenses of the trustees or deployment in various business ventures.
Collectively, the Income Tax Department has asserted that DMK MP Jagathrakshakan is associated with tax evasion amounting to a colossal ₹1,200 crores.
On 14th April 2023, we released part 1 of #DMKFiles, detailing the wealth amassed by DMK leaders for a quantum of 1,34,317 Crores.
In #DMKFiles, we released the wealth of DMK MP Thiru Jagath Rakshakan for a value of ₹50,208 Crores and the list of companies owned by him & his… pic.twitter.com/RyC4ntw4Wu
— K.Annamalai (@annamalai_k) October 19, 2023
This revelation has sparked intense controversy and further highlights the ongoing political tensions in Tamil Nadu. The BJP and its chief, K. Annamalai, have accused the DMK of being a party that serves the interests of a select few at the expense of the state’s populace.
In April 2023, Udhayanidhi Stalin filed a defamation suit against Annamalai asking ₹50 crore as damages and in May 2023, DMK Chief and Tamil Nadu Chief Minister MK Stalin filed a defamation case against Annamalai.
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