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The Enforcement Directorate (ED) has provisionally attached assets worth ₹205.36 crore of MGM Maran and MGM Anand and their company Southern Agrifurane Industries Pvt. Ltd. on charges of unauthorisedly offloading a certain percentage of shares of Tamilnad Mercantile Bank (TMB) to overseas persons, which is suspected to be an act of money laundering.
MGM Maran was the chairman of TMB during the year 2007 when he, along with other directors and officials of the bank, facilitated the sale of 23.60 per cent of the shares of TMB from Indian shareholders to unauthorised overseas persons, the ED alleged in a statement. “MGM Maran acquired undisclosed foreign investments of Rs 293.91 crore directly from outside India during the same period. Such undisclosed investments were made without the approval of the RBI as well as from unexplained and highly dubious sources,” the agency revealed.
To escape from the reach of enforcement agencies, MGM Maran surrendered his Indian citizenship and obtained Cyprus citizenship. MGM Maran was found to have started transferring his wealth from India overseas in order to keep the same out of reach of the Indian law enforcement agencies under the guise of overseas direct investments from the Indian company “Southern Agrifurane Industries Pvt Ltd,” the ED charged.
On the complaint of AD Bank and Axis Bank, the Central Crime Branch of the Chennai Police registered an FIR, which the ED took over to launch an investigation under the Prevention of Money Laundering Act, 2002.
The company, said the agency, tried its best to scuttle the probe and filed a Writ Petition against proceedings before the Madras High Court in October 2022 and obtained an interim stay by misrepresenting facts before the judges. ED’s detailed counter-affidavit explains the entire background and facts of the case.
Accordingly, the Hon’ble Madras High Court, vide landmark judgment (WP 28140/2022) dated December 19, 2022, dismissed the Writ petition and upheld that the company, by making a false declaration, has induced the AD Bank to deliver valuable foreign exchange, and such remittance in the hands of the wholly owned subsidiaries of the company, situated outside India, would constitute proceeds of crime,” pointed out the ED statement.
ED has now provisionally attached proceeds of crime under PMLA as the equivalent value in the form of the entire shareholding of both Maran and Anand in all prominent MGM Group companies in India, lands, and buildings in “Southern Agrifurane Industries Pvt Ltd,” as well as the entire shareholding (3.31%) of Maran in TMBL, which has recently been listed on BSE.
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