The Enforcement Directorate (ED) on Monday provisionally attached 30 kg of gold bars worth Rs. 8,56,99,350 of J. Sekhar Reddy and his associates in lieu of the exchange of old notes to new currency notes under the provisions of the Prevention of Money Laundering Act, 2002 (PMLA).
After the demonetisation drive, the Income Tax Department conducted raids at various places of Sekhar Reddy, the managing partner of SRS Mining, and seized about Rs. 97 crore worth of old currency notes, Rs. 34 crore of new currency notes and about 177 kgs of gold bars.
To this effect, the Central Bureau of Investigation (CBI) registered FIRs against them for fraudulently converting demonetised currency into new currency.
The ED is conducting investigation under the PMLA against the perpetrators based on the CBI cases registered against them in relation to the seized possessions and the previously attached new currency worth Rs. 34 crores.
Reddy was examined under the provisions of the PMLA, where he stated that the cash seized by the ITD belonged to his mining company and admitted that it was unaccounted money. However, he did not disclose the actual source of new currencies other than stating that it is from the sand mining business.
Partners of M/s SRS Mining stated that they used to transport large amounts of cash by road without maintaining any accounts for the said amounts, so as to conceal the illegal earnings from the accounted income.
During the raids, 30 kgs of gold bars were recovered and seized by the ITD authorities from the residence of M. Prem Kumar.
Earlier, Prem Kumar stated that he used to receive money from Srinivasulu, an associate of Sekhar Reddy, for the purchase of one kg gold bars and the seized 30 kg was purchased accordingly using the demonetised currency and belongs to Sekhar Reddy.
Srinivasulu and Sekhar Reddy admitted the same and stated that it was procured from the unaccounted money and belong to SRS Mining.
Further investigation in this matter is currently underway.