ED seizes over Rs 293 crore worth shares of ex-Tamil Nadu Mercantile Bank chairman in FEMA probe

The Enforcement Directorate (ED) on Tuesday said it has seized shares worth Rs 293.91 crore of former Tamil Nadu Mercantile Bank Limited Chairman Nesamanimaran Muthu in connection with a probe against him linked to alleged contravention of the FEMA law. The seized assets are in the form of shareholdings of Muthu alias MGM Maran in four Indian companies: Southern Agrifurane Industries Private Limited, Anand Transport Private Limited, MGM Entertainment Private Limited and MGM Diamond Beach Resorts Private Limited.

The agency said in a statement that Muthu had incorporated two companies in Singapore during 2005-06 and 2006-07 financial years and invested SGD 5,29,86,250 (equivalent to Rs 293.91 crore).

"This investment was made without taking approval from the RBI. Further, the source of such a huge investment abroad was not disclosed to the Indian regulators," the agency said.


Section 37A(1) of the Foreign Exchange Management Act (FEMA) empowers the ED to seize domestic assets of a person who has acquired properties in a foreign country or made investment outside India without the approval of the RBI while he was a Indian resident.

"Since, the amount of foreign investment was SGD 5,29,86,250, the assets of equivalent value thereof of Rs 293.91 crore have been seized," it said.