ED attaches 30 kg gold bars worth Rs 8.57 cr from businessman Sekhar Reddy

Seizure made under PMLA, follows Rs 34 cr attachment of new currency notes from Reddy and associates

The Enforcement Directorate (ED) has provisionally attached 30 kg gold bars worth Rs 8,56,99,350 belonging to businessman J Sekhar Reddy and his associates. The provisional attachment is under the provisions of the Prevention of Money Laundering Act, 2002 (PMLA).

On May 5 the ED had provisionally attached Rs 34 crore of new currency notes from Reddy and his associates.

After demonetisation, the Income-Tax Department has conducted searches at various places owned by Reddy, the managing partner of SRS Mining and seized about Rs 97 crore in old currency, Rs 34 crore in new currency and about 177 kg of gold bars.

Subsequently, the CBI registered FIRs against them for converting demonetised notes to new currency fraudulently.

The Enforcement Directorate is conducting an investigation under PMLA against Reddy, who is allegedly well-connected with political parties, based on the CBI cases registered against him and his associates in relation to such seizures.

Reddy has already been examined under the provisions of PMLA. The ED said that he has stated that cash seized by the IT department belonged to his SRS Mining Company, even as he admitted that the money was unaccounted. He has not divulged the actual source of new currency other than stating that it is from the sand mining business.

Reddy's associate Srinivasulu has stated that he used to receive money from SRS Mining and had used some of it for converting into gold bars through Premakumar, under instructions from Reddy.

The remaining cash, which was kept at various premises, was recovered and seized by the Income-Tax department.

Reddy was, at one time, on the board of Tirumala Tirupati Devasthanam Trust, which manages one of the world's richest temples at Tirupati. Tonnes of gold and crores of rupees are managed here. He was removed from the Board last December following an IT raid.

During the searches 30 kg of gold bars valued at Rs 8,56,99,350 was recovered and seized by the IT Department Authorities from the residential premises of M Prem Kumar. He has claimed that he used to receive money from Srinivasulu, an associate of Reddy, to buy gold bars weighing one kg and the seized 30 kg of gold bars from his residence was purchased using the demonetised currency that elonged to Reddy, said ED.

Srinivasulu and Reddy admitted to the Directorate's contention and said the gold was procured from unaccounted money belonging to SRS Mining. However other two partners of SRS Mining, Ramachandran and Rethinam denied the contention and said they never instructed to purchase gold bars, said ED.

On reasonable belief that the seized 30 kg of gold bars is part of the proceeds of a crime, it was attached under the provisions of PMLA .

Further investigations are in progress, the ED stated.