ED attaches assets worth 216 crore of Director MGM Maran former chairman of Tamilnad Mercantile Bank Limited

Enforcement Directorate seized assets worth Rs. 216.40 crore from a Chennai-based company Southern Agrifurane Industries Pvt Ltd [SAIPL] and its promoter/directors MGM Maran (former chairman of Tamilnad Mercantile Bank Limited) and MGM Anand Under the provisions of the Foreign Exchange Management Act (FEMA), 1999,

The seized assets include land and buildings owned by SAIPL in Tamilnadu and Telangana; shares owned by MGM Maran in Tamilnad Mercantile Bank Limited (representing 3.31 percent of TMB, which recently filed a Draft Red Hearing Prospectus for an IPO); and shares owned by MGM Anand in Indian companies SAIPL, MGM Entertainment Pvt Ltd, and Anand Transport Pvt Ltd.

SAIPL was discovered to have syphoned off Rs 216.40 crores in Indian funds abroad under the guise of Overseas Direct Investments [ODI] through False Declarations to its AD Bank as well as by structuring transactions in such a way as to send outward remittances without any bona fides and with the sole objective of removing funds from India in the name of ODI without any genuine business reasons for the Indian company SAIPL. Such cash have been moved outside of India under the guise of ODIs in order to avoid the clutches of Indian regulations. By doing so, the corporation was able to divert around 85 percent of its total net value offshore.

The ED issued a notification to AD bank, and following receiving the notice, AD bank conducted an internal investigation into the incident and suggested that the case be classified as ‘Fraud.’

MGM Maran also abandoned his Indian passport on December 21, 2016 and obtained a ‘Cyprus Passport’ in order to become a Cyprus citizen. In the case of MGM Maran in another FEMA investigation, MGM Maran remained completely non-compliant to the proceedings, failing to attend the ED office even once despite multiple summons and failing to submit any of his foreign asset details, resulting in another seizure order of his Indian assets worth Rs 293 Crore in December 2021.