Chennai, March 21 (IANS) The Enforcement Directorate (ED) has arrested sand mining baron J. Sekhar Reddy and his two associates for allegedly exchanging Rs 34-crore old notes into new currency notes (Rs 2,000), said an official on Tuesday.
“We arrested Reddy, K. Srinivasulu and Premkumar under the Prevention of Money Laundering Act, 2002 (PMLA) on Monday for converting Rs 34-crore old notes into new notes that were seized by the Income Tax Department in mid-December,” ED Joint Director S.V.V. Prasad told IANS.
The law enforcing economic intelligence agency (ED) has been investigating the cases under PMLA after the Central Bureau of Investigation (CBI) registered a case against the three accused on December 22, and arrested them.
“Though Reddy admitted that the seized cash was unaccounted and belonged to his SRS Mining, he did not divulge its source. He, however, claimed that 177 kg gold bars seized during the search of his premises was his and he procured them through Premkumar,” recalled Prasad from Reddy’s disclosures during the probe.
During interrogation, Premakumar told the ED that he supplied gold bars of one kg to Reddy and received demonetised currencies through Srinivasulu in exchange.
“Premkumar also confessed to the ED that 30kg of gold bars seized by the tax sleuths from his house also belonged to Reddy only,” reiterated Prasad.
Srinvasulu also admitted to the ED that he received money from Reddy’s mining firm SRS Mining and used to convert a part of it into gold bars through Premkumar.
“The three kept the remaining cash at various premises before the I-T Department searched and seized from them, but Reddy has not told us the modus operandi of converting old notes into new currencies,” asserted Prasad.
The central government demonetised the old Rs 500 and Rs 1,000 notes on November 8 to eliminate black money, counterfeit notes and terror funding, and asked the public to exchange them for new notes till December 30, 2016.
“The magistrate has remanded the accused to seven-day judicial custody till March 28 and they have been lodged in the Puzhal Central Prison here,” added Prasad.
Industrialist Reddy was a member of the Tirumala Tirupathi Devesthanam (TTD) Board at Tirupathi in the neighbouring Andhra Pradesh state.