Southern States - Tamil Nadu

ED closes probe against Jayalalithaa

By Our Legal Correspondent

NEW DELHI JUNE 8. The Enforcement Directorate (ED), which conducted a preliminary investigation into the receipt of $ 3 lakhs as gift by the Tamil Nadu Chief Minister, Jayalalithaa, in 1991 has closed the probe for want of evidence that the amount was routed through `hawala' transaction.

The CBI case in a Chennai special court against Ms. Jayalalithaa and her close associate, Sasikalaa (who too received a gift), under the Foreign Exchange Regulation Act (FERA) for alleged violation of foreign exchange is still pending.

The ED investigation of whether the gifts received by them availing themselves of the Centre's immunity scheme pertained to any `hawala' transaction or routed as a gift to escape the FERA provisions.

Government sources said the probe has been closed for want of evidence. Moreover, after May 31, FERA is no longer in the statute book as the law has been replaced by the Foreign Exchange Maintenance Act.

Though FERA was replaced by FEMA in 2000, two years was given to complete the existing cases by May 31.

It was also found that both Ms. Jayalalithaa and Ms. Sasikalaa had shown the amounts received as gifts in their income-tax returns and had paid tax. Hence, investigation was closed stating that no case of alleged foreign exchange violation existed against them.

However, CBI sources told The Hindu that the response to the Letter Rogatory sent by the court to Channel Island, from where the amount was received as gift, was awaited.

It is reported to be of the view that the chances of securing a satisfactory reply to the Letter Rogatory are rather remote.

The CBI also said that even if the charges relating to foreign exchange violation was dropped, investigation into other aspects of the case relating to the receipt of the gifts, (viz., whether it had any other connection) would continue and a report would be filed in the special court.

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