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Chennai: Penalty of Rs 28 cr imposed on Sasikala's nephew Dinakaran by HC

The Madras High Court confirmed an order of FERA Appellate Board on Friday imposing a penalty of Rs 28 crore on former AIADMK MP and party General Secretary VK Sasikala’s nephew TTV Dinakaran in a case initiated by the Enforcement Directorate in 1996. First bench comprising Chief Justice SK Kaul and Justice R Mahadevan passed the order while dismissing a petition filed by Dinakaran challenging FERA board’s May 5, 2000, order.

The matter related to receipt of more than US $10 million by Dinkaran in alleged contravention of the Foreign Exchange Regulation Act in 1994-95. Originally, a total penalty of Rs 31 crore was imposed on Dinakaran by the Enforcement Directorate Special Director (FERA), New Delhi, on February 6, 1998, for contravention of provisions of Sec 8(1), 9(1) (a) and 14 of FERA.

Aggrieved by this, Dinakaran filed an appeal in the FERA Appellate Board, which in its May 5, 2000, order found him guilty on all counts in respect of all alleged transactions, but reduced the amount involved from US $1,04,93,313 to US $62,61,313 and imposed a total penalty of Rs 28 crore. Challenging this, Dinakaran filed the present petition in the high court the same year.

In its order, the bench said a perusal of records showed that the appellant had been given a fair opportunity. As found by the appellate authority, the guilt of appellant was culled out only from the documentary evidence and the entire statements of the other witnesses were discarded. “Thus the plea of bias put forth by the appellant does not hold any water. Appellate authority had independently examined the issues based on the evidence on record afresh. The order of the appellate authority is hereby confirmed,” it said dismissing Dinakaran’s petition.

The ED had imposed the penalty following a show cause notice issued to Dinakaran. The notice had alleged that the accused, a resident of India, being not an authorised dealer in foreign exchange, had acquired foreign exchange totalling US $1,04,93,313 during 1994-95 without the previous general or special permission of the Reserve Bank of India.

The foreign exchange amount was deposited in the current account of Dipper Investments Company Ltd, a company incorporated in the British Virgin Islands and of which Dinakaran was a director, with the Barclays Bank, Sutton, UK, violating section 8(1) and 9(1)(a) of FERA.