In a 16-page interim order, the Board's chairman Sarvesh Chandra and member KD Singh also said that the Enforcement Directorate had tried to conceal facts in the financial status report filed by them on Dinakaran's assets. The ED failed to state in the report that ``assets mentioned therein are subject to attachment.''

The waiver was given on the grounds that since all assets of Dinakaran were attached by Income Tax authorities, he was not in a position to raise Rs 31 crore. His counsel B Kumar had argued that Dinakaran neither had funds nor the means to pay even a fraction of the penalty. He had said that if the waiver was not granted, Dinakaran would be unduly deprived of his right to appeal. The pre-deposit of the penalty is a pre-requisite before an appeal can be made against the case. The Boardhad asked the ED to give the factual position of Dinakaran's assets.

``We are constrained to observe that in spite of clear directions of this Board to the respondent (ED) to file a report, supported by an affidavit, on the assets exclusively held by the appellant (Dinakaran) and to state whether these are free from encumbrances, KS Achutha, assistant director, Chennai zonal office of the ED has filed an affidavit, which not only defies the directions but also contain irrelevant and misleading information,'' the order stated.

Though the waiver order was read out during the last Board hearing on September 23, it was only released today.

Waiving off the pre-deposit of the penalty, the Board stated that ``Dinakaran does not hold funds and he does not have adequate means to arrange funds to deposit the amount of penalty or any part of it, and that it would cause undue hardship if he is required to pre-deposit the amount of penalty in order to pursue his appeal.''

Citing reasons for the waiver, the Boardsaid that the financial status report mentioned items -- including House number 2, 4th street, Venkateswara Nagar, Chennai -- which were already attached by Income Tax Recovery Officer (order dated February 17, 1998), so no funds could be raised against them.

Dinakaran, according to the adjudication order passed by the ED on February 6, had floated front companies in Singapore and Malaysia and transferred huge amounts of foreign exchange without the permission of the Reserve Bank of India. Two transactions -- one for $1,04,93,313 and the other for pounds 44,37,242 -- were probed by the ED and penalty amounting to Rs 31 crore was imposed.