DMK leader Jagathrakshakan’s links to Sri Lanka’s ‘biggest’ FDI deal, explained

An exclusive report by ‘The Hindu’ linked the DMK's Arakkonam Lok Sabha candidate, S Jagathrakshakan, to the 'single largest foreign investment' deal in Sri Lanka.
DMK leader Jagathrakshakan’s links to Sri Lanka’s ‘biggest’ FDI deal, explained
DMK leader Jagathrakshakan’s links to Sri Lanka’s ‘biggest’ FDI deal, explained
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Former Union Minister for State (I&B) and DMK’s Arakkonam candidate in the upcoming Lok Sabha polls, S Jagathrakshakan, is linked to the ‘single largest foreign investment’ deal in Sri Lanka, an explosive new report by The Hindu states. According to the report, the DMK Vanniyar heavyweight’s family runs the Singapore-based Silver Park International Pte Ltd, the company which is investing a part of the whopping USD 1887 million share capital in the deal. The deal is for a USD 3.85 billion oil refinery coming up in the Hambantota industrial zone, located in the country's Southern Province.

The report is significant for a number of reasons, according to several experts and watchers TNM has spoken to, especially since it is election year in both the countries.

One, for the DMK in Tamil Nadu, the report comes days after it released its poll manifesto for the Lok Sabha elections, reiterating its demand for an ‘independent and credible international probe into the human right violations, war crimes and genocide in Sri Lanka.’ The main opposition party in the state has voiced its stance against the Sri Lankan government and its treatment of Tamils in the country over the years. A leader from the party investing vast sums of money in Sri Lanka warrants an explanation from its top leadership.

Two, Sri Lanka’s Presidential elections are due to take place later this year, months after a bitter 51-day political feud between President Maithripala Sirisena and former President Mahinda Rajapaksa. An India-backed project in Sri Lanka at a politically-charged time such as this may invite opposition from Sinhala nationalist parties in the country, say observers in Sri Lanka. As early as September 2017, Mahinda Rajapaksa had accused the Sri Lankan government of 'auctioning' all ‘national assets’ in what was perceived as a veiled reference to an oil facility to be operated by both countries in Sri Lanka's Trincomalee.

Thirdly, the project, which is situated close to the Chinese-owned Hambantota port, is also geo-politically important for India even as it manages its neighbour to the north. However, there has been no official mention so far of an Indian connection to the oil refinery.

How much money from the Jagathrakshagan family is going into the project?

Silver Park International, the company from Singapore, lists Jagathrakshakan’s wife Anusuya, daughter Sri Nisha and son Sundeep Anand as part of its Board of Directors. A search revealed that while the company was reportedly incorporated in 2017, its website was registered in February this year. According to The Hindu, the company is investing 70% of the share capital of USD 1887 million in the project. At today’s exchange rate, the company’s investment stands at about Rs. 9125 crores. Jagathrakshakan’s 2014 affidavit stated that he has a total income of about Rs 15.5 lakhs while his wife had a total income of about Rs 2.04 crores.

Is the company fit for the job?

The Hindu reports that the latest development in the issue is Oman pulling out of the deal on Wednesday, a day after Sri Lanka’s Board of Investment announced that the country was investing in the project, along with the Singapore-based company. In addition to cements and sand mining, the company's website describes itself as an international oil and gas refinery company. "It is a vertically integrated company operating in all areas of the oil and gas industry, including exploration and production, refining, distribution and marketing, petrochemicals, power generation and trading. It also has renewable energy interests in bio fuels and wind power,"(sic) it states. However, with well-known oil-exporter Oman pulling out, it remains to be seen if Silver Park will be able to pull off the project on its own.

Meanwhile, the Oman Oil Company, a commercial company wholly owned by the Government of Oman, had reportedly told the Sri Lankan government that it had 'firm intention' to “participate in equity up to 30%, subject to reaching an agreement between the parties.”

Allegations of corruption in the past

The large-scale foreign investment also brings to light the politician’s chequered past. A 2009 investigation by the Times Now caught on camera officials from Jagathrakshagan’s Shree Balaji Medical College and Hospital demanding capitation fees from a student. In 2012, the leader was accused of receiving coal allocations from the Puducherry government for a company reportedly owned by his family.

TNM has reached out to the DMK and will update this story once it receives a response.

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