ED seizes over Rs.293 crore worth shares of ex-Tamil Nadu Mercantile Bank chairman Nesamani Maran Muthu (known as MGM Maran) in FEMA probe

The assets seized by ED are in the form of shareholdings of Muthu alias MGM Maran in four Indian companies

December 28, 2021

ED seizes unlisted shares of Nesamani Maran Muthu Aka MGM Maran

The Enforcement Directorate (ED) on Tuesday seized shares worth Rs.293.91 crore of former Tamil Nadu Mercantile Bank Limited Chairman Nesamani Maran Muthu, known as MGM Maran in connection with a probe against him linked to an alleged contravention of the FEMA (Foreign Exchange Management Act). 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.

MG Muthu Group (MGM Group) is engaged in Logistics, Hospitality, Liquor and Distillery, Housing, Infrastructure, Movie production, Entertainment parks, and International trades. MGM Muthu’s father late M G Muthu started his career in the mid-50s as a headload worker in Chennai Port and later as a cargo handler and enlarged to a huge group in the early 70s with the blessing of many politicians in Tamil Nadu.

MGM Muthu was the youngest Chairman of Tamil Nadu Mercantile Bank. 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. Those days of illegalities, P Chidambaram was the Finance Minister and MGM Group was doing all sorts of illegalities in total brazen ways.

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 an Indian resident. “Since, the amount of foreign investment was SGD 5,29,86,250, the assets of the equivalent value thereof of Rs.293.91 crore have been seized,” said a statement. ED tweeted:

ED has seized assets worth Rs. 293.91 Crore of Nesamanimaran Muthu alias MGM Maran, former chairman of Tamilnadu Mercantile Bank Limited, under the FEMA, 1999. The seized assets are in the form of shareholdings in four Indian Companies.

— ED (@dir_ed) December 28, 2021

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