Chennai: The Enforcement Directorate on Tuesday provisionally attached around 50 kg of gold ingots/bars worth over Rs 13.96 crore, belonging to sand contractor J. Sekhar Reddy and his associates. Gold and currency were seized by income tax department during the raid immediately after demonetisation.
According to ED, the action is being taken under the provisions of Prevention of Money Laundering Act, 2002 (PMLA). It may be recalled that following demonetisation, I-T sleuths seized about Rs 97 crore in old currency notes, Rs 34 crore in new currency noted and 177 kg of gold bars from him and his associates.
During the searches, 49.4 kg of gold bars valued at '13.96 crore were seized by the Income Tax officials from a flat belonging to SRS Mining, which were attached by the ED on Tuesday. According to a statement from ED, Rs 10 crore in old currency, '34 crore in new currency, 6.5 kg of gold bullion, and 30 kg of gold seized in its raids has already been attached provisionally.
After the I-T searches and seizures, the CBI registered cases against Reddy and his associates for converting demonetised currencies into new notes in a fraudulent manner, while ED had initiated investigations under PMLA act.
“Though Reddy had acknowledged that the seized money was unaccounted, he has not divulged the actual source of new currencies other than stating that it is from the sand mining business,” the ED said.
According to ED, Reddy and his associates converted a part of such unaccounted money into gold bars through M.Premkumar, who used to receive money from K.Srinivasulu, an associate of Reddy, for purchase of gold. Between November 20 and December 7, 2016, Premkumar purchased about 80 kg gold, using cash provided by various persons on behalf of Srinivasulu.
The purchases were made without bills or vouchers. According to ED, Srinivasulu has stated that he used to receive money from SRS Mining and used a part of the same for converting into gold bars through Premkumar according to the instructions of Reddy.
The ED said the two partners of SRS Mining - Ramachandran and Rethinam - had stated that they used to transport huge amounts of unaccounted cash by road so as to conceal the illegal earnings. “However, they stated that they never gave instructions on the purchase of gold bars and this may be on the instructions of Sekhar Reddy only,” the ED said.
