The Enforcement Directorate on Saturday said Gokulam Gopalan, one of the producers of L2: Empuraan, had acquired foreign funds worth ₹592.54 crore in violation of the RBI guidelines and the Foreign Exchange Management Act.

The central agency conducted raids at the offices of Sree Gokulam Chits and Finance Co Pvt Ltd in Chennai for the second consecutive day. "During the raids, unaudited cash worth ₹1.5 crore had also been seized from Gopalan's office in Chennai," an ED source said.

The ED said it gathered "specific" intelligence that the company, without due permission from the authority, was collecting subscriptions to chit funds from persons residing outside India.

"The subscription amounts from these persons were being collected in cash in violation of the regulations framed by the RBI. This led to the violation of Regulation 4(b) of Foreign Exchange Management (Permissible Capital Account Transactions) Regulations, 2000, read with circular No. 107 dated June 11, 2015, issued by the RBI," the agency claimed.

The company collected ₹371.8 crore in cash from persons residing outside India and ₹220.74 crore through cheques from the same category of people, the ED alleged. "Significant amounts were paid in cash to the persons resident (residing) outside India in violation of Section 3(b) of Fema," the ED said.

There was no immediate response from Gopalan or his company on the ED allegations.

The ED searches come against the backdrop of the controversy surrounding L2: Empuraan, which became a topic of hot debate over its oblique mention of the Gujarat riots.