Industrialist Shekhar Reddy, two associates get bail

The Madras High Court on Friday granted bail to industrialist Shekhar Reddy and two of his associates arrested on charges of laundering money.

The court granted bail to Reddy provided he produced a surety of Rs 10 lakh. His associates -- K. Srinivasulu and Premkumar -- were granted bail on furnishing of sureties for Rs 500,000 each.

The court also ordered the three to appear before the Enforcement Directorate (ED) in Delhi and sign the register there daily until further orders.

On May 5, the ED said it had provisionally attached properties worth Rs 33.74 crore of Reddy and his associates under the Prevention of Money Laundering Act (PMLA).

In a statement issued here, it said the provisional attachment was done in connection with a case of exchanging old or demonetised currency for new notes.

The ED said it was conducting investigation under the PMLA against Reddy and others based on the cases registered by the Central Bureau of Investigation (CBI) against them in relation to the seizure of about Rs 34 crore of new currency notes from them by the Income Tax Department.

According to the ED, on examination under the PMLA, Reddy had stated that cash seized by the Income Tax Department belonged to his SRS Mining company and admitted that it was unaccounted money.

"He has not divulged the actual source of new currencies other than stating that it is from the sand mining business," the ED had said.

It said Reddy's associate Srinivasulu had stated that he used to receive money from SRS Mining and used part of for buying gold bars through Premakumar, as per Reddy's instructions.

Remaining cash was kept at various premises and the same was earlier recovered and seized by the Income Tax Department.

However, Srinivasulu has not divulged the modus operandi of converting old currencies into new ones, the ED said.

Investigations revealed that the demonetised currencies are converted into new through various persons on commission basis.

On reasonable belief that the seized new currencies to the tune of Rs 33,74,92,000 are proceeds of crime, the same were provisionally attached under the provisions of PMLA, said the ED, adding that further investigations were being conducted.

--IANS

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