Tamil Nadu: Why Is Senior DMK Minister K Ponmudy Being Raided By ED Officials?

Upping the ante against the ruling Dravida Munnetra Kazhagam (DMK) government, the Enforcement Directorate (ED) today (17 July) raided the premises of Higher Education minister K Ponmudy and his son P Gowthamasigamani, a Lok Sabha MP.

Ponmudy has a long and chequered past with multiple allegations of illegal quarrying, land grabbing etc.

A six-time legislator and influential party leader, Ponmudy has been a minister in the last four DMK governments.

Considered a part of the inner coterie of DMK that wields enormous power, Ponmudi enjoyed proximity to the late Karunanidhi.

He was among the leaders whose names were mentioned by Bharatiya Janata Party (BJP) state president K Annamalai for amassing wealth through corruption and not declaring all assets in their election affidavits while presenting the DMK Files.

Ponmudy and his son Gowthamasigamani were estimated to have assets worth Rs 581.20 crore, according to the data presented by Annamalai.

While the ED has not officially announced the reason for the raids, here are at least three cases in which Ponmudy and family have faced grave allegations.

FEMA Case

In October 2020, the ED issued seizure order under Foreign Exchange Management Act (FEMA) against properties held by his son Gowthamasigamani,. The properties were estimated to be worth Rs 8.60 crore.

According to the ED, the amount was equivalent to the value of his "illegally acquired" foreign security and non-repatriation of foreign exchange that he earned abroad till date. 

The ED said that it had launched investigation after receiving information that GGowthamasigamani had illegally acquired foreign security without RBI's approval.

During the course of ED investigation, it was revealed that in March 2008, Gowthamasigamani, being a resident in India, made overseas investment of $ 1,00,000 (Rs 41,57,225) in acquiring 2,45,000 shares of PT Excel Megindo, Jakarta and $55,000 (Rs 22,86,924) in Universal Business Ventures, UAE without securing RBI's approval.

Red Sand Quarrying Case

Ponmudy, who held the Mines and Minerals portfolio in the DMK government (2006-2011) led by late Chief Minister M.Karunanidhi, was booked in September 2012 in connection with the allotment of a red sand quarry at Poothurai village in Vanur block to his son Gowthamasigamani and five others.

Ponmudy was booked under various provisions of the Tamil Nadu Minor Minerals Concession Act, Prevention of Corruption Act, and various sections of the IPC for conspiracy, assault or criminal force to deter public servant from discharge of his duty, theft, criminal breach of trust, cheating and criminal intimidation. 

The police filed the case based on the complaint of Vanur Tahsildar alleging that lessees excavated beyond permissible limits and thereby illegally prospected 2,46,646 units of red sand, causing a loss of Rs. 28.37 crore to the state exchequer. According to the police, lessees (Gowthamasigamani and associates) indulged in gross violations of rules governing minor minerals.

In October 2012, Ponmudy was arrested from his residence in Villupuram town in the red sand quarrying case. Ponmudy's arrest came after Madras high court refused to grant him anticipatory bail in the case. He was lodged in Trichy Central Prison.

Accepting the argument of the state Advocate General, Madras High Court Justice G M Akbar Ali had observed that the gravity of the offence was enormous and considering the status of the petitioners, who were influential persons, they might tamper with the witness and that they might also abscond.

"The natural resources of mother earth have been devoured with greed, which is a crime committed against her.” Justice Ali further added.

The Madras High Court recently refused to stay proceedings in the case on a plea by Gowthamasigamani. The case is therefore continuing at the MP/MLA special court in Villupuram.

Land Grabbing Cases

Thanthai Periyar Transport Corporation Cooperative Housing Society

In August 2011, Ponmudy was arrested by the All India Anna Dravida Munnetra Kazhagam (AIADMK) government in a land-grabbing case following a complaint filed by an office bearer of Thanthai Periyar Nagar Residents’ Welfare Association accusing him of acquiring 61,600 sq. ft of land meant for utilities for residents there in connivance with the secretary of the Thanthai Periyar Transport Corporation Cooperative Housing Society through a bogus resolution.

Ponmudy was alleged to have later transferred the land to the educational trust run by his family.

Saidapet, Chennai

Ponmudy also faced allegations of grabbing about 3,600 square feet of government land at Saidapet in 1998 using fabricated documents and registering it in the name of his mother-in-law, when he was the transport minister in the Karunanidhi cabinet.

He was recently acquitted in the case. The judge held that the prosecution was unable to prove the case beyond a reasonable doubt.

(Updated at 14.50 pm to add additional information)