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Tracking the probe on Sekhar Reddy's illegal money trail — Gold, cash and murky deals

Tracking the probe on Sekhar Reddy's illegal money trail

Rs. 96.89 crore in demonetised notes, Rs. 9.63 crore in Rs. 2000 notes and gold weighing 127 kg worth Rs. 36.29 crore  were seized from J. Sekhar Reddy (centre) and two of his associates after three days of raids.  

An Income Tax department's raid in Chennai unearthed over Rs. 9 crore in new currency notes at a time when banks would allow withdrawal of only Rs.24,000 cash per person per week due to post-demonetisation cash crunch.

Rs. 96.89 crore in demonetised notes, Rs. 9.63 crore in Rs. 2000 notes and gold weighing 127 kg worth Rs. 36.29 crore  were seized from J. Sekhar Reddy and two of his associates after three days of raids.

What followed was a joint probe by taxmen, CBI and Enforcement Directorate.

 

Tracking the probe on Sekhar Reddy's illegal money trail — Gold, cash and murky deals

ED arrests sand mining baron Sekhar Reddy

Income Tax department officials come out of the office of K. Rathinam, an associate of Sekhar Reddy, after conducting raid in his premises in Dindigul on Saturday.   | Photo Credit: Special Arrangement

Industrialist and sand mining baron J. Sekhar Reddy was arrested by the Enforcement Directorate (ED) late night on Monday.

A senior Enforcement Directorate official said, “He has been arrested on charges of money laundering. He has been remanded in judicial custody.” More details would be available later as they were still quizzing him on the issue.

Ongoing investigation

On December 20, 2016, the ED registered a case against Reddy and his business partner Sreenivasulu under the provisions of the Prevention of Money Laundering Act (PMLA).

This was based on an FIR registered by the CBI.

On December 9, the Income Tax Department, during a search, unearthed ₹96.89 crore cash in old high denomination notes and ₹9.63 crore in ₹2,000 currency, along with gold weighing 127 kg, approximately worth ₹36.29 crore.

A day after, another ₹24 crore in ₹2,000 notes was seized by the department.

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Tracking the probe on Sekhar Reddy's illegal money trail — Gold, cash and murky deals

CBI gets two-day custody of Sekhar Reddy, associates

Judge asks agency whether RBI top brass was questioned in the case

A special court for Central Bureau of Investigation cases on Wednesday granted the CBI two-day custody of industrialist Sekhar Reddy and his associates Srinivasulu and Prem Kumar who were arrested on charges of possessing ₹8 crore cash in ₹2,000 denomination.

Pronouncing his order, XI Additional Special Judge for CBI cases K. Venkatasamy directed the CBI to ensure that no third degree methods were adopted and the accused were brought back in the same state of health as they were being taken.

Reiterating that the investigation officer’s questions should only be relevant to the charges made in the FIR, Mr. Venkatasamy said the CBI should furnish the list of bank officials who colluded with the accused (in getting the new currency) while producing the accused after two days and there should be no attempt to record any false statement from them.

Mr. Venkatasamy said while banks had no cash to disburse to the people and a majority of ATMs were closed down, the accused managed to get so much money within one month of printing. “This could not have happened with the assistance of branch level bank officials. The Reserve Bank of India would have clear information how the money reached the accused on the basis of serial numbers on the notes… they will have knowledge on when and where that consignment of notes was actually sent. Did you enquire the highest authority in the Reserve Bank of India in this case,” the Judge asked the CBI officials.

Charge against CBI

Earlier, senior counsel for the accused I. Subramanian said there could be no two FIRs based on the same source of information. The CBI had suppressed the fact that its earlier petition seeking custody of the accused was dismissed by another court. Though this is a different FIR, the facts and circumstances of the case were the same. The new cases arose out of the same set of facts.

The defence counsel argued that investigating agency had split the case into two to suit its convenience. “The CBI had accepted the dismissal of its petition seeking custody in the first FIR and did not challenge it. Now, they are suppressing that fact before this court and seeking custody based on a second FIR that was registered with the only intention to take custody of the accused. Some fairness was expected of the CBI,” he said.

Senior Public Prosecutor M.V. Dinakar, representing the CBI, said the accused had obtained several crores of new currency notes within days after they were printed. Even as people died without food or standing in long queues for one ₹2,000 note, the accused had sourced huge volume of new currency with the connivance of some people.

“They cannot seek the protection of law envisaged under the Constitution to keep silence. This is a fit case for custodial interrogation. They have to explain how they got so much money since it is their exclusive knowledge,” he said, and added that the court could not brush aside the sufferings of the people who accepted the policy of the government to safeguard the economy.

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Tracking the probe on Sekhar Reddy's illegal money trail — Gold, cash and murky deals

Former Tamil Nadu Chief Secretary terms raid a ‘constitutional assault’

Hits out at State government for not standing up for him

Former Tamil Nadu Chief Secretary P. Rama Mohana Rao lashed out at the Central and State governments on Tuesday, calling the recent income tax raid on his house and official chamber in the Secretariat a “constitutional assault” on his high office, alleging procedural violations in the operation and debunking reports of large-scale seizures.

Speaking to the media outside his house in Anna Nagar here, Mr. Rao invoked the name of former Chief Minister Jayalalithaa multiple times, even questioning whether such a raid would have happened had she been alive.

Mr. Rao criticised the State government for not standing up for him.

He denied any links with Sekhar Reddy, a businessman and public works contractor arrested by the CBI and whose properties were also raided by the taxmen the previous week.

On December 21, the Income-Tax department conducted extensive searches at the houses and offices of Mr. Rao and his family members in Chennai, Bengaluru and Andhra Pradesh where they seized ₹30 lakh cash and five kg of gold. Three days later he complained of chest pain and was admitted to Sri Ramachandra Hospital and was discharged on Monday.

After thanking West Bengal Chief Minister Mamata Banerjee, Congress leader Rahul Gandhi and Rajya Sabha member S.R. Balasubramoniyan, who joined the AIADMK recently, for criticising the searches, Mr. Rao assailed what he alleged were irregularities in the raids.

 

“My name was not there in the [search] warrant. My son’s [Vivek Papisetty] name was there and he does not live here [Anna Nagar]. After he returned to India he has lived separately,” he added.

Searches based on evidence: official

Mr. Rao questioned the authority by which his chamber at the Secretariat was searched by the Income-Tax department.

“If the former Chief Minister were alive would anyone have had the guts to enter the Chief Secretary’s chamber? Where is the State government? Whose permission did they get?” he asked.

Reacting to Mr. Rao’s comments, a senior Income-Tax official said the raids were conducted as per law. Based on documents found in one particular place, a search can be carried out at multiple locations without prior notification, the official said. Another official added: “Mr. Rao and Mr. Sekhar Reddy had strong connections and the raids were based on evidence.”

Mr. Rao claimed that he was still the Chief Secretary of the State, considering that his transfer orders had not been served to him. “They have not shown me a copy of the transfer order.”

He waved a set of documents, including the Panchnamas relating to the raid. “They found Rs. 1,12,320 in cash, 42 sovereigns of gold and silver weighing 25 kg,” he read out from the sheet.

On ‘secret chamber’

Pointing to a door at the basement of his house, Mr. Rao said, “There were reports that this is a ‘secret chamber.’ That is a store room where old material and clothes are kept.” Copies of these documents were later released to the media.

Mr. Rao also said he feared for his life. “I’m being targeted and my life is in danger. If this can happen to me, what will happen to others,” he told the media, towards the end of the half-hour press meet.

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Tracking the probe on Sekhar Reddy's illegal money trail — Gold, cash and murky deals

CBI raids premises of Sekhar Reddy’s aides

Income Tax department officials come out of the office of K. Rathinam, an associate of Sekhar Reddy, after conducting raid in his premises in Dindigul on Saturday.   | Photo Credit: Special Arrangement

Central Bureau of Investigation (CBI) officials conducted extensive searches on the premises of S. Ramachandran and K. Rathinam — associates of sand baron Sekhar Reddy — on Saturday.

Both have already been arrested and remanded in judicial custody.

According to sources, the office of S. Ramachandran in Pudukottai town and his house in Muthupattinam were searched by officials. Ramachandran had a liquor shop in Muthupattinam village in 1996. A decade later, he obtained a licence for mining sand in a few places in the southern districts. Gradually, he began playing a bigger role in sand mining in the central region.

In Dindigul, the office and house of K. Rathinam, chief executive officer of the GTN College, were simultaneously searched. He was arrested in Chennai for exchanging a large number of old currency notes. The police said that Mr. Rathinam was helping Reddy in exchanging old notes in Dindigul. Managers of nationalised and private banks may also be questioned, they added. Rathinam, a retired surveyor from Athoor block in Dindigul district, was into real estate, hotel and sand businesses.

Rao hospitalised

Meanwhile, former chief secretary P. Rama Mohana Rao was admitted to a private hospital in Porur on Saturday. Hospital authorities stated that he had complained of chest pain and was placed under observation.

(Inputs from Sangeetha Kandavel in Chennai.)

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Tracking the probe on Sekhar Reddy's illegal money trail — Gold, cash and murky deals

Sekhar Reddy’sbail plea adjourned

The Principal Judge for CBI cases here on Friday directed the Puzhal Central Prison authorities to consider the request of former Tirumala Tirupati Devasthanams (TTD) board member and industrialist J. Sekhar Reddy and his associates to be provided ‘A’ class facilities in the jail.

Mr. Sekhar Reddy and his associates were arrested and remanded in judicial custody on Wednesday for possessing several crores in new currencies.

The Judge G. Vijayalakshmi also adjourned their bail petitions and CBI’s application seeking their custody to December 27.

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Tracking the probe on Sekhar Reddy's illegal money trail — Gold, cash and murky deals

Rama Mohana Rao’s son seeks time to appear before I-T team

Former Chief Secretary P. Rama Mohana Rao’s son Vivek Papisetty, who is a businessman, has sought time to appear before income tax officials for questioning in connection with the searches conducted at his house and that of his associates.

The I-T department had issued summons to Mr. Vivek, directing him to appear before it on Friday. “He did not turn up, and instead, requested for time. He may appear before us on Saturday or Monday,” said an IT Department official. No fresh searches were conducted on Friday.

According to a senior I-T official from the Investigation Wing, a suspect in the case Amalanathan, who is a liaisonist, was questioned at the Aayakar Bhavan in Nungambakkam.

The tax sleuths indicated that the documents seized so far from the houses of Mr. Rao, his son and others indicated that they all had links with the arrested sand mining baron and expelled TTD member J. Sekhar Reddy.

In a separate development, a senior official from the Enforcement Directorate (ED) said that they would soon start a probe into the money laundering case registered against Mr. Reddy.

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Tracking the probe on Sekhar Reddy's illegal money trail — Gold, cash and murky deals

TN sand baron Sekhar Reddy’s associate arrested at Mumbai airport

Kolkata-based businessman Paras Mal Lodha is produced at the Saket Court in Delhi on Thursday. The Enforcement Directorate arrested him for allegedly converting more than Rs. 25 crore of old notes into new ones in connivance with international hawala operators.  

Kolkata-based businessman Paras Mal Lodha is charged with converting Rs. 25 crore of demonetised notes into new currency.

The investigation that followed the arrest of J. Sekhar Reddy, Chennai-based sand mining baron and expelled Tirumala Tirupati Devasthanams board member, has turned into a pan-India exercise with multiple central agencies cracking down on his alleged associates.

On Thursday, a day after the Income Tax Department conducted extensive searches at the houses and offices of former Tamil Nadu Chief Secretary P. Rama Mohana Rao and others, the CBI arrested three suspected associates of Mr. Reddy in Chennai.

Separately, the Enforcement Directorate on Tuesday night arrested Kolkata-based businessman Paras Mal Lodha, who is also linked to Mr. Reddy, at the Mumbai airport for allegedly converting more than Rs. 25 crore of demonetised notes into new ones in connivance with international hawala operators.

Though the I-T Department completed its search operations at Mr. Rao’s premises, taxmen continued to search the offices belonging to his son, Vivek Papisetty.

Papers found

One of the premises searched on Chamiers Road in Nandanam housed Mr. Papisetty’s three companies — Trans Earth Logistics, Blue Ocean Personnel and Allied Services Private Limited and Virtu Technologies. Mr. Papisetty is also the managing director of 3LOK Infra and Logistics Private Limited, which has its registered office in Bengaluru.

A senior officer from the I-T Department-Investigations Wing, said, “We are scrutinising how his [Vivek’s] companies were funded. We have found some papers and are going through it.”

The taxmen simultaneously covered three more people — Kalyanasundaram, Chairman of State Level Environment Impact Assessment Authority; Gopu Rajagopal ; and Amalanathan who, according to taxmen, is into “liaison” work.

At Mr. Kalyanasundaram’s house, officials unearthed “undisclosed income” to the tune of Rs. 1.07 crore. The I-T team could not find anything at Mr. Amalanathan’s office in Kodambakkam, but it found Rs. 6 lakh of demonetised currency and Rs. 2.98 lakh of new notes at his house in Valasaravakkam. “Amalanathan had an undisclosed income of Rs. 1.75 crore,” said an official.

At Mr. Rajagopal's house, officials found Rs. 5.34 lakh of new currency. He reportedly admitted that Mr. Reddy had given him Rs. 15 crore a few days ago. “We have not concluded the searches at Mr. Rajagopal’s premises. It is still on,” the official said.

More arrests

The CBI, which arrested Mr. Reddy and his associate Srinivasulu on Wednesday, picked up three more people — Prem Kumar, Ramachandran and Rathnam — against whom it had registered a case of stashing away black money. The trio was produced in a Chennai court and remanded in judicial custody.

The CBI had registered a case against the five and others, including unknown bank officials and public servants, after the I-T Department earlier this month conducted searches and seized more than Rs. 130 crore cash and about Rs. 50 crore worth of gold from Mr. Reddy and his associates. The CBI case is that the seizure included Rs. 33.6 crore of new currency, which couldn’t have been procured without the connivance of bank officials.

The searches on Mr. Rao’s premises too were based on alleged evidence gathered during Mr. Reddy's interrogation.

Lodha being questioned

An Enforcement Directorate official said “We had information that Lodha was coming to Mumbai from Kolkata to take a connecting flight to Malaysia, and accordingly we intercepted him at the airport.”

Mr. Lodha was then taken to the city office of the ED for questioning in connection with his alleged involvement in converting demonetised currency for Delhi-based lawyer Rohit Tandon and Mr. Reddy.

“Lodha’s questioning threw up enough prima facie evidence for us to take further action, and he was then taken to Delhi, where he was placed under arrest on Thursday,” the officer added.

The ED has obtained seven days custody of the accused for the identification of others involved in the racket.

(With inputs from S. Vijay Kumar in Chennai, Devesh Pandey in New Delhi and Gautam S. Mengle in Mumbai)

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Tracking the probe on Sekhar Reddy's illegal money trail — Gold, cash and murky deals

I-T searches on premises of Rama Mohana Rao’s son continue

CRPF personnel deployed outside the residence of Tamil Nadu Chief SecretaryRama Mohana Rao’s at Thiruvanmiyur in Chennai.   | Photo Credit: M. Karunakaran

On Wednesday, the I-T dept.unearthed “undisclosed income” to the tune of Rs. 5 crore from the house of Vivek Papisetty.

Income Tax officials continued search operations for the second day at the premises of former Tamil Nadu Chief Secretary P. Rama Mohana Rao’s son.

On Wednesday, the officials unearthed “undisclosed income” to the tune of Rs. 5 crore from the house of Mr. Rao’s son, Vivek Papisetty, in Thiruvanmiyur in Chennai.

In simultaneous searches on Wednesday, the Income Tax Department went through the residential and office premises of Mr. Rao in Chennai, Bengaluru and Andhra Pradesh, and seized Rs. 30 lakh cash in new currency and 5 kg of gold.

Sources said the searches were carried out based on evidence gathered during the recent raids on the business and private premises of J. Sekhar Reddy, a government contractor and his two associates. Reddy, a big-time sand mining contractor, was on Wednesday arrested by the CBI.

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Tracking the probe on Sekhar Reddy's illegal money trail — Gold, cash and murky deals

CBI arrests Sekhar Reddy, associate

Officials say details of seizures made cannot be revealed at this stage

The Central Bureau of Investigation (CBI) on Wednesday arrested former Tirumala Tirupathi Devasthanams (TTD) Board Member and industrialist J. Sekhar Reddy and his associate K. Srinivasulu in connection with the seizure of new currency to the tune of several crores from their premises.

The accused were produced in a city court and remanded in judicial custody till January 3, 2017.

According to sources in the agency, the arrest of Mr. Reddy and his associate comes days after income-tax officials conducted simultaneous searches on their premises and seized more than Rs. 120 crore in cash and a huge quantity of gold. Based on “source information”, the CBI registered a case under the provisions of the Indian Penal Code and the Prevention of Corruption Act, 1988, against the accused persons.

“Our case is focussed on the seizure of Rs. 33.6 crore of new currency (Rs. 2,000 denomination) from the premises of Sekhar Reddy and his associates. It is suspected that they managed to get the new currency with the connivance of some bank officials and public servants,” a spokesperson for the CBI told The Hindu on Wednesday. Confirming that investigators conducted searches in Chennai and Vellore, the spokesperson said details of seizures made could not be divulged at this stage.

The CBI had registered a case against Mr. Reddy, his associates Srinivasulu and Prem Kumar, unknown bank officials and public servants.

Agency seeks custody

Another CBI official said the role of Prem Kumar was under investigation and added that a petition was filed in the designated court seeking 15-day custodial interrogation of the accused.

Stating that the agency had no role in the searches conducted by the Income Tax Department on the premises of Tamil Nadu Chief Secretary P. Rama Mohana Rao, the official said further investigation in the CBI case would be based on various aspects, including material evidence gathered so far and statement of the accused.

The arrested accused were produced before the Principal Judge for CBI cases G. Vijayalakshmi here. The two filed separate applications seeking to enlarge them on bail.

The judge posted the case to December 23 for hearing their bail pleas as well as the CBI’s petition seeking their custodial interrogation.

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Tracking the probe on Sekhar Reddy's illegal money trail — Gold, cash and murky deals

A ‘Search Strike’ launched with precision

CHENNAI : 21/12/2016 : CRPF people seen during Income Tax officials raids Chief Secretary's residence at Anna. Nagar. Photo : K_Pichumani   | Photo Credit: K. Pichumani

Meticulous planning and extreme secrecy marked the operation as teams of officials swooped down on various locations across the country

The simultaneous raids on the premises of Tamil Nadu Chief Secretary P. Rama Mohana Rao in Tamil Nadu, Karnataka and Andhra Pradesh was a closely guarded secret even within the Income Tax Department though the preliminary investigation and other groundwork for operation ‘Search Strike’ began days ahead.

Sources in the intelligence agencies said only a handful of top income-tax officials was aware of the operation that stemmed out of the huge seizure of cash and gold from the premises of city-based industrialist J. Sekhar Reddy and his associates.

Several teams of income-tax officials were asked to report at a pre-determined location around 3 a.m. on Wednesday and given a briefing about ‘Search Strike’.

Precisely at the designated time, the teams landed at the respective target locations. But, they had no idea where they were heading to. Team leaders were given a sealed cover containing the address and location map of the destination.

“It was only on reaching the target places did the team members know whose premises they had come to search. This is the usual style of income-tax searches…but in this case, extra caution was taken considering the nature of the case and persons involved,” a police officer quoting official sources said.

State unaware

As the news of the searches were flashed in the media and journalists started thronging the house of Mr. Rao in Anna Nagar here, the Income Tax Department decided to rope in Central para military forces around noon.

However, the Tamil Nadu government was not aware of central forces being deployed at the residence of the Chief Secretary.

Neither the Public Secretary nor the Director General of Police was aware of any requisition for deployment of central police forces in the city.

“Deployment of central forces is normally done at the request of the State government as ‘law and order’ is a State subject. In this case, it seems that the State made no such request,” a senior police officer, who preferred not to be quoted, said.

However, under provisions of Section 132 of the Income Tax Act and various sub-sections, the authorised officer “may requisition the services of any police officer or of any officer of the Central Government or State Government or both, to assist him for all or any of the purposes specified” including entry and search “of any building, place, vessel, vehicle or aircraft where he has reason to suspect that such books of account, other documents, money, bullion, jewellery or other valuable article or thing are kept...and it shall be the duty of every such officer to comply with such requisition.”

While top bureaucrats remained tight-lipped on the developments, police sources said the roping in of central forces would have been necessitated either in anticipation of ‘law and order’ issues or shortage of local police at the scene of searches.

Central police forces were previously deployed in Tamil Nadu after the death of former Chief Minister Jayalalithaa.

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Tracking the probe on Sekhar Reddy's illegal money trail — Gold, cash and murky deals

Taxmen raid T.N. Chief Secretary

CRPF men deployed outside the residence of Tamil Nadu Chief Secretary P. Rama Mohana Rao at Anna Nagar in Chennai on Wednesday.  

Cash, gold seized in searches on official’s premises across 3 States

In simultaneous searches, unprecedented in their scale and nature, the Income Tax Department on Wednesday went through the residential and office premises of Tamil Nadu Chief Secretary P. Rama Mohana Rao in Chennai, Bengaluru and Andhra Pradesh, and seized Rs. 30 lakh cash in new currency and 5 kg of gold. Besides, they unearthed “undisclosed income” to the tune of Rs. 5 crore from the house of Mr. Rao’s son, Vivek Papisetty, in Thiruvanmiyur here.

The raids began early in the morning at Mr. Rao’s two-storied bungalow in Anna Nagar here and extended to 10 other places, including his office in the State Secretariat. Considering that the State police were under the Chief Secretary’s command, the I-T officers, in the afternoon, requisitioned deployment of armed personnel from the Central Reserve Police Force to provide security. Nearly 100 senior officials of the I-T department were involved in the operations.

I-T department sources said the searches were carried out based on evidence gathered during the recent raids at the business and private premises of J. Sekhar Reddy, an expelled member of the Tirumala Tirupati Devasthanam Board-cum-government contractor and his two associates. Reddy, a big-time sand mining contractor, was on Wednesday arrested by the CBI, which registered cases with regard to money laundering and under the Prevention of Corruption Act and the Indian Penal Code and remanded in judicial custody.

Income Tax officials step out of the house of Tamil Nadu Chief Secretary P. Rama Mohana Rao in Chennai on Wednesday night.

Income Tax officials step out of the house of Tamil Nadu Chief Secretary P. Rama Mohana Rao in Chennai on Wednesday night.   | Photo Credit: R. Ragu

A senior official in the Income Tax Investigations Wing in Chennai told The Hindu that more people would come under their scanner. According to the taxmen, the searches were conducted in connection with Mr. Rao’s links to Reddy. On December 8, the I-T department cracked a case of money laundering after scrutinising the premises of Reddy, sand miner K. Sreenivasulu and their associate Prem Kumar. Reddy runs a firm JSR Infra Developers Private Limited.

The I-T department said that during the searches, Rs. 96.89 crore cash in withdrawn high denomination notes and Rs. 9.63 crore in new Rs. 2,000 currency notes, along with gold weighing 127 kg and worth approximately Rs. 36.29 crore, were seized from the trio.

 

(With inputs from S. Murali in Ongole)

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Tracking the probe on Sekhar Reddy's illegal money trail — Gold, cash and murky deals

ED files case against Sekhar Reddy, aides

The house of Sekar Reddy at Gandhi Nagar, Vellore, was among the eight premises raided by the I-T officials. — File Photo: C. Venkatachalapathy  

Rs. 34 crore of new notes seized during raids two weeks ago

The Enforcement Directorate on Tuesday registered a case against former Tirumala Tirupati Devasthanam (TTD) board member J. Sekhar Reddy and his business partner Sreenivasulu under the Prevention of Money Laundering Act (PMLA). Prem Kumar, their associate, will also be quizzed.

The ED will be investigating how these three persons managed to get new Rs. 2,000 currency notes at a time when people are standing in queues in front of banks and ATMs for withdrawing cash.

The Income Tax Department seized Rs. 34 crore in new notes during the raids two weeks back from the premises of the trio. The taxmen began their search on December 8 on eight premises (six residential and two offices).

K.S.V.V. Prasad, Joint Director, Enforcement Directorate, Chennai, told The Hindu, “We have registered a case against the three businessmen. This was based on an FIR registered by the CBI. We will start probing into this case..

The CBI has registered a case against Sekhar Reddy and others under various provisions of the IPC and the Prevention of Corruption Act, 1988.

The case follows raids on the premises of Mr. Reddy and his associates Prem Kumar and Sreenivasulu that led to seizure of huge quantity of cash and gold in Chennai, Vellore and other places. After preliminary investigation, the CBI registered a case against the trio, unknown bank officials and public servants under Section 120 (B) (criminal conspiracy) read with Section 409 (criminal breach of trust), 420 (cheating) of IPC and other provisions under the Prevention of Corruption Act, 1988.

Parrying questions on the nature of investigation, findings and role of bank officials or public servants in the case, a senior CBI official said revealing such information at this stage could affect further investigation. No arrests have been made in the case till date, the official added.

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Tracking the probe on Sekhar Reddy's illegal money trail — Gold, cash and murky deals

Searches in TN, Karnataka yield 78 kg gold, Rs. 29 cr. in new notes

Income Tax officials searching the house of Sekhar Reddy at Gandhinagar in Vellore.   | Photo Credit: C. VENKATACHALAPATHY

Searches by Income Tax officials, which continued across the country on Saturday, yielded fresh seizures of Rs. 24 crore in new Rs.2, 000 currency notes and 50 kgs of gold worth Rs.15 crore from J. Sekhar Reddy and K. Sreenivasulu in Tamil Nadu. Rs. 5.7 crore in Rs. 2,000 notes, Rs. 90 lakh in old currency, 28 kg of bullion and 4 kg of gold jewellery were seized in raids in 15 locations in Karnataka.

Following the raids and sharp criticism from the Opposition, Andhra Pradesh Chief Minister Chandrababu Naidu on Saturday instructed the Tirumala Tirupati Devasthanams Trust Board to dismiss J. Sekhar Reddy from the Trust.

In Chennai and Vellore, I-T officials continued searching the premises of J. Sekhar Reddy and K. Sreenivasulu for the third day. A senior official told The Hindu, “We have found Rs. 24 crore (all new Rs.2000 notes) and 50 kg of gold. We will now be freezing what we have found so far,” he said. “The search has pointed to more people and we will be searching them soon,” he added.

Until Saturday, officials had seized Rs. 96.89 crore of demonetised notes, Rs. 33.63 crore of Rs.2,000 notes and gold weighing 177 kgs worth approximately Rs.51.29 crore from the premises of Mr Reddy and his associates. This takes the total tally to Rs. 181.81 crore.

In searches in Karnataka, officials who searched three houses of one Veerendra, a financier at Chellakere in Chitradurga, found a secret chamber in a bathroom with a cache of new currency notes.

Officials recovered Rs. 5.7 crore in Rs. 2,000 notes during searches in Hubballi and Chitradurga.

The officials also recovered Rs. 90 lakh in old currency, 28 kg of bullion and 4 kg of gold jewellery.

The Income Tax Department has targeted a clique of hawala and casino operators, and bullion traders who are also said to be deeply entrenched in cricket betting.

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Tracking the probe on Sekhar Reddy's illegal money trail — Gold, cash and murky deals

Remove Sekhar Reddy from TTD Trust Board: Left parties

Consequent to taxmen seizing huge quantities of currency notes and gold from his Chennai residence

TTD Trust Board member J. Sekhar Reddy is in the midst of a storm after the Income-Tax Department raided his Chennai residence on Thursday and seized currency notes and gold in huge quantities.

The Left parties and social activists on Friday demanded that Sekhar Reddy be removed from the prestigious TTD Trust Board.

The CPI(M) lashed out at the government for always preferring to appoint businessmen and contractors as members of the trust board.

“Such persons always use the coveted post for pursuing their business interests and personal gains,” it said.

“The Sekhar Reddy episode has once again brought the issue to the fore,” said party’s district secretary K. Kumar Reddy.

“Prime Minister Narendra Modi’s demonetisation drive has turned out to be a laughing stock,” P. Naveen Kumar Reddy, convener of the Rayalaseema Porata Samithi, told the media, referring to the unearthing of new Rs.2,000 currency notes in large quantities at Sekhar Reddy’s residence.

“On the one hand people are being made to run from pillar to post for drawing their hard-earned money from banks and, on the other, the influential are cornering wads of new notes,” he said.

The CPI activists took out a protest march demanding that Sekhar Reddy be immediate removed from the TTD Trust Board.

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Tracking the probe on Sekhar Reddy's illegal money trail — Gold, cash and murky deals

Behind cash and gold seized in Chennai IT raids, lies a tale of many big contracts

Huge Haul: The cash seized by the Income Tax department. A total of Rs. 106 crore in cash, including Rs 10. crore in new notes and 127 kg gold, were seized.  

Those whose premises were searched by taxmen got several road, public works projects.

One hundred taxmen started their search operations on Thursday at eight different locations in Chennai connected with three men, to probe a suspected money laundering racket.

By end of day on Friday, the Income Tax department had seized Rs. 96.89 crore in demonetised notes, Rs. 9.63 crore in Rs. 2000 notes and gold weighing 127 kg worth Rs. 36.29 crore from the three men - J Sekhar Reddy, K Sreenivasulu and Prem.

As soon the news broke, social media was abuzz with questions on who the men were and how they accumulated so much legal tender when banks are unable to meet the demand. Enquiries provided some details on their business interests.

J. Sekhar Reddy, hailing from Thondanthulasi near Katpadi, is a businessman with interests in real estate, media, infrastructure, mining and trading. He runs JSR Infra Developers Pvt. Ltd (earlier called Vaibhav Infrastructure) which focuses on laying of new roads, widening and expansion of existing highways, irrigation work, desilting of dams, restoration of old dams, river bed desilting, river management work, construction of drains, bridges and flyovers, water supply, and sewerage and ancillary projects.

He started this firm in 2009, and made quick progress. The firm counts Highways Departments and Public Works Departments of Tamil Nadu as a major client. According to its website, it has handled road improvement projects in Chennai and Tambaram and flood protection work on the left bank of Kollidam (Coleroon) river in Chidambaram taluk of Cuddalore district besides road projects in Katpadi.

Currently, the firm is working on widening Madurai Ring Road from double lane to four lane and similar widening of East Coast Road, among others. While the former project is for the Tamil Nadu Road Infrastructure Development Corporation, the second is for Tamil Nadu Road Development Corporation Limited. The company is also working on two World Bank-funded projects. Mr. Sekhar also runs SRS Mining, and is a member of Tirumala Tirupati Devasthanam Trust Board.

A real estate sector source in Chennai, who requested anonymity said, “Both Sekhar and Sreenivasalu have long time close ties and have several partnership firms. Both are close to some government officials.”

Sreenivasulu is the Executive Director of JSR Infra Developers Pvt. Ltd., and joined the firm early on. The Hindu found on the Ministry of Corporate Affairs website, using his Director Identification Number, that he also held posts in several other firms including SRS Merchandise Pvt. Ltd., SRS Innovations Pvt. Ltd., and Umak Resource Communications Pvt. Ltd.

A search on the Ministry website for Sekhar showed that he also has more firms under him including Sri Balaji Tollways (Madurai) Pvt. Ltd., Vesta Realty Pvt. Ltd., V-Top Infratech Pvt. Ltd., among others.

At Vellore, Sekhar operates several sand quarries. A section of villagers of Thottalam where a sand quarry operated on the Palar riverbed were “persuaded” to give up their protest against sand mining. Recently, he entered the hotel business too, launching a chain of restaurants in the Fort City of which two have been opened.

Enquires about Prem revealed that he was an employee of the duo. A senior Income Tax official told The Hindu on Friday that the search was still in progress in 4 out of 8 premises. Specific details including modus-operandi would emerge after examination of the documents and other evidence detected.

(with Serena Josephine in Vellore)

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Tracking the probe on Sekhar Reddy's illegal money trail — Gold, cash and murky deals

Rs. 24 crore in Rs. 2000 notes seized on day 3 of I-T raids

The cash seized by the Income Tax department on Thursday.  

The total seizure in the tax evasion case has now gone up to Rs. 164 crore.

On day three of raids, Income Tax officials have seized Rs. 24 crore in Rs. 2000 notes from three men — J. Sekhar Reddy, Srinivasalu and Prem — in Vellore.

A senior Income Tax official who confirmed the news, said,  “We have unearthed more Rs. 2000 currency notes. We are investigating them on how they got these notes.”

Until Friday, the Investigation Directorate of the Income Tax Department had seized Rs. 96.89 crore in demonetised notes, Rs. 9.63 crore in Rs. 2000 notes and 127 kg of gold worth Rs. 36.29 crore in Chennai from the trio.

The taxmen began their search on December 8 at eight premises (six residential & two offices).

The searches are in progress.

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Tracking the probe on Sekhar Reddy's illegal money trail — Gold, cash and murky deals

Day 2 of Chennai IT raids: More gold, cash seized

The Investigation Directorate of Income Tax Department has seized Rs. 96.89 crore of demonetised notes, Rs. 9.63 crore of Rs. 2000 notes and gold weighing 127 kg worth Rs. 36.29 crore in Chennai from three men — Sekhar Reddy, Srinivasa Reddy and Prem.

The taxmen began their search on December 8 at eight premises (six residential & two offices).

According to a statement from Meenakshi J. Goswami, Commissioner of Income Tax (Media and Technical Policy) Official Spokesperson, CBDT, “The group is engaged in sand mining. The group has sand mining licence for the entire state of Tamil Nadu.

A senior income tax official on Friday told The Hindu that the search is still in progress in 4 out of the 8 premises.

More specific details including modus-operandi would emerge after examination of the documents and other evidence detected during the search.

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Tracking the probe on Sekhar Reddy's illegal money trail — Gold, cash and murky deals

In Chennai IT raids, Rs.90 crore cash, 100 kg gold unearthed

The building premises in Vijayaraghava Road, T. Nagar, Chennai, where Income Tax department raids were going on.   | Photo Credit: Sangeetha Kandavel

This includes Rs. 2,000 notes worth Rs.10 crore.

The Income Tax Department on Thursday busted a money laundering racket and seized Rs. 120 crore in demonetised notes, new currency and gold.

According to Income Tax officials, three associates — Sekhar Reddy, Srinivasa Reddy and Prem — were involved in these transactions. Around 100 taxmen were deployed for this operation.

“Sekhar and Srinivasa are into the business of sand quarrying and construction. Prem was their agent,” said an Income Tax official from the investigations department.

Sekhar Reddy is also a member of the Tirumala Tirupati Devasthanams Trust Board.

The taxmen have unearthed Rs. 80 crore in the demonetised Rs. 500 and Rs. 1,000 notes. They also found Rs. 10 crore in the new Rs. 2,000 notes.

A senior investigating officer told The Hindu: “Gold bars weighing 100 kg were also seized.”

According to estimates, the gold bars would be worth Rs. 30 crore.

The Income Tax sleuths were surprised how the three men managed to get Rs. 10 crore in new notes when people were struggling to withdraw cash from banks and ATMs.

Asked whether any bank or its officials were hand in glove, the tax official said: “Some banks would have helped them and we are probing that angle too.”

Hotel searched

The raids were conducted at eight locations, including Anna Nagar, Thyagaraya Nagar and Teynampet.

Another source in the department said that in Teynampet, it was a hotel that was searched.

On Vijayaraghava Road at T.Nagar, the officials carried counting machines into the apartment. “The amount is huge, so we used seven counting machines,” said an investigating officer. One of the security guards at T.Nagar said Sekhar and Srinivasa hardly came to the apartment. “They come in their cars once a week or once in 10 days and leave in a few hours,” he said.

Asked whether this search was connected with any political party in Tamil Nadu, the officials refused to comment.

“The raids are still continuing and more details would be made available on Friday,” the official said.

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