The Enforcement Directorate (ED) on Tuesday said it has seized assets worth Rs 293.91 crore belonging to Tamilnad Mercantile Bank’s (TMB) former Chairman Nesamanimaran Muthu alias MGM Maran under the Foreign Exchange Management Act (FEMA).

According to the ED, the seized assets are in the form of shareholdings in four In Indian companies, namely, the Southern Agrifurane Industries Private Ltd, Anand Transport Private Ltd, MGM Entertainment Private Ltd, and MGM Diamond Beach Resorts Private Ltd. Incidentally, the three of the companies are unlisted entities.

The ED said Maran had incorporated two companies in Singapore during 2005-06 and 2006-07 and invested Singapore $5,29,86,250 equivalent to Indian Rs 293.91 crore, but the investment was made without Reserve Bank of India’s (RBI) permission and non-disclosure to Indian regulators.

According to the agency, the provisions of Section 37A(1) empower it to seize Indian assets of a person who has acquired assets in a foreign country or made investment outside India without the approval of the RBI while he was a person resident in India.

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Since the amount of foreign investment was SGD 5,29,86,250, the assets of the equivalent value thereof of Rs 293.91 crore has been seized, it said. Last year, the Adjudicating Authority under FEMA had levied a penalty of Rs 35 crore on Maran for opening a bank account in Singapore and receiving foreign exchange to the tune of US$ 68,50,000 (equivalent to Rs 28.08 crore) in that ac- count from a foreign entity.

The said payment is the consideration for facilitating and assigning the rights towards the transfer of shares of the TMB in favor of Katra Holdings Ltd, consequent to a private agreement with that company. The penalty is also for failing to repatriate the said foreign exchange into India, the ED had said then.

The Adjudicating Authority had also fined Standard Chartered Bank Rs 100 crore and the TMB Rs 17 crore. The ED had taken up the probe under FEMA based on a reference received from the RBI to investigate advance remittances received by certain entities for the purchase of the shares of the Tuticorin-headquartered TMB through an escrow mechanism maintained with Standard Chartered Bank, Mumbai.

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