The Madras High Court has confirmed a penalty of ₹25 crore imposed on TTV Dhinakaran by the Enforcement Directorate in a two-decade-old Foreign Exchange Regulation Act violation case against him.
Dhinakaran is the nephew of AIADMK General Secretary VK Sasikala and a former Rajya Sabha MP.
The case relates to a large remittance of money into Dhinakaran’s bank accounts between 1991 and 1995. The ED initiated proceedings under FERA, and rejected his claim that he was a Singaporean and therefore out of the probe agency’s purview. He was found guilty, and asked to pay a fine of ₹25 crore. An appellate authority also upheld the fine, after which Dhinakaran moved the Madras High Court.
The First Bench of Chief Justice Sanjay Kishan Kaul and Justice R Mahadevan, while dismissing Dhinakaran’s petition, said, “All the questions of law are answered against the appellant [Dhinakaran] and in favour of the revenue. The impugned order passed by Foreign Exchange Regulation Appellate Board in appeal dated May 5, 2000 is confirmed.”
Originally, a penalty of ₹31 crore was imposed on Dhinakaran by an order passed by the ED Special Director on February 6, 1998. The adjudication was passed following a show-cause notice issued on January 29, 1996.
Dhinakaran was directed to repatriate to India and offer for sale to an authorised dealer, the foreign exchange amounting to $6.2 million held by him outside the country together with interest and any other income that might have accrued thereon.
The show-cause was issued based on allegations that a person resident in India, other than an authorised dealer in foreign exchange, had without Reserve Bank permissions, acquired forex of $10.04 million from persons other than an authorised forex dealer, and deposited the amount in the account of Dipper Investments Ltd, a company incorporated in the British Virgin Islands, with Barclays Bank, UK, and lent the amount to a person who was not an authorised dealer, in violation of FERA rules.
Further, a sum of £43.23 lakh was transferred to Meer, Care and Desai; £90,000 to Westback Ltd and £23,685 to an undisclosed account in the Bank of Ireland in contravention of FERA, Friday’s court order said.
The adjudicating authority found Dhinakaran guilty on all counts in respect of alleged transactions.