'Proceeds of crime': Embarrassment for DMK as ED attaches ₹34.7 lakh funds of Udhayanidhi Stalin Foundation

In a significant development causing embarrassment for the ruling DMK party, the Directorate of Enforcement (ED) has taken provisional action by attaching funds amounting to ₹34.7 lakh in the bank account of M/s Udhayanidhi Stalin Foundation. The ED has alleged that the foundation received proceeds of crime totaling ₹1 crore. It is important to note that the foundation is associated with Udhayanidhi Stalin, the son of Tamil Nadu Chief Minister M.K. Stalin, who also serves as the Sports Minister.

Trustees failed to explain rational for receipt: ED

"The trustees of the foundation failed to explain the rational for the above receipt from the parties involved in the case," the agency revealed on Saturday.

The agency has also provisionally attached various immovable properties across Tamil Nadu, valued at ₹36.3 crore, belonging to individuals involved in the case.

What is the alleged fraud about?

According to officials, the ED initiated investigations based on an FIR registered by Central Crime Branch-I, Chennai. The FIR alleged that the complainant, Gaurav Chachra, Director of M/s Pettigo Commercio Internacional Lda, a subsidiary of the UK-based Lyca Group with a significant presence in India through Lyca Productions, Lyca Hotels, etc., had been defrauded of ₹114.37 crore by the Kallal Group and its Directors/founders.

Investigations conducted by the ED have revealed that the magnitude of the fraud amounts to ₹300 crore. It was discovered that the Lyca Group had made additional investments/loans to the accused group and its entities without conducting proper due diligence or having a reasonable rationale. As a result, searches were conducted at both the accused and complainants' related entities on April 27 and May 16. These searches led to the discovery of various incriminating pieces of evidence, including digital evidence, documents, properties, and suspicious cash and hawala transactions. The ED is currently scrutinising and investigating these findings.

Foundation's fund attached to secure 'proceeds of crime'

Meanwhile, on May 25, the ED took action to provisionally attach funds from the Udhayanidhi Stalin Foundation "to secure part of the proceeds of crime."

The agency has stated that the total proceeds of crime in the case amount to approximately ₹300 crore. As part of the ongoing investigation, immovable properties valued at ₹36.3 crore and movable properties in the form of a bank account with an available balance of ₹34.7 lakh have been attached. The ED has further stated that the investigation is still underway.