The Enforcement Directorate (ED), Chennai, has provisionally attached properties worth ₹34 crore, belonging to mining baron J. Sekhar Reddy and his associates, under the provisions of the Prevention of Money Laundering Act, 2002 (PMLA).
“This was done on the basis of the available evidence. In the last few months, we have recorded statements of the people involved, both in prison and when they came to the ED office for inquiry,” said a senior ED official.
When asked whether Mr. Reddy has accepted that he converted the cash, an official said, “He is silent on it.”
Post demonetisation, the Income Tax department searched the house, offices and properties of Mr. Reddy and his associates. They seized around ₹97 crore in old currency, ₹34 crore in new currency and 177 kg of gold. The CBI registered an FIR against those involved for fraudulently converting demonetised currencies into new notes. The ED’s probe is based on the CBI case. “Mr. Reddy has stated that the cash seized by the Income Tax officials belongs to his firm, SRS Mining, and has admitted to it being unaccounted. He has not divulged the source of the new currencies, apart from stating that it is from the sand mining business,” said K.S.V.V. Prasad, joint director, ED, Chennai.
Similarly, Mr. Reddy’s partner, K. Srinivasulu, — also under the I-T and ED scanner — hasn’t disclosed the modus operandi behind the conversion of the scrapped currencies into new notes. The Investigation thus far has revealed that the new notes which were seized by the tax authorities are nothing but currencies in exchange for demonetised notes, inclusive of commission for such exchange, received by Reddy, Srinivasulu, M. Premkumar, S. Ramachandran and K. Rethinam. Mr. Reddy had also exchanged ₹6-₹7 crore in new currency through Ashok. M. Jain and Mahaveer Hirani, in co-ordination with Parasmal Lodha.
As per the ED’s findings, SRS Mining transported the unaccounted cash by road. The firm did not maintain any accounts for the collections and expenses in order to hide the illegal earnings.
