The day income-tax authorities searched the homes and official chamber of Tamil Nadu chief secretary Rama Mohan Rao, the CBI arrested a contractor-sand miner who has been at the centre of the I-T crackdown so far. Sekhar Reddy, 49, has seen 14 of his premises raided since December 8. I-T officials claimed they have seized Rs 132 crore in currency notes including Rs 34 crore in Rs 2,000s, as well as 177 kg gold including 80 kg seized from a suite in a Chennai five-star hotel. “They had booked two such rooms for a long period. The bills, mostly in tranches of Rs 10 lakh, were paid by a firm owned by Reddy,” said an I-T officer.
It was to probe the sources of the currency that the CBI had stepped in, arresting Reddy and two of his associates Wednesday. Reddy’s high connections were in public focus even before the raids began, with vernacular media widely reporting his alleged wealth havens and transactions. Around the time the late J Jayalalithaa was released from Bangalore prison, a photo that went viral showed Reddy with present Chief Minister O Panneerselvam, who had also stood in for Jayalalithaa during that period. Side by side, Reddy and OPS stood in front of the Tirupati temple. Reddy, part of the managing body Tirumala Tirupati Devasthanams, has since been removed. Reddy’s possible links to the chief secretary too are being probed.
Owner of an estimated dozen sand quarry business in Vellore, Reddy began as a civil contractor who went on to handle many big-ticket infrastructure and road projects. Government sources cited the examples of the widening of Madurai Ring Road, East Coast Road in Chennai and some World Bank-funded projects.
Reddy, known to be religious, is married with a daughter. Asked about the seizures and his alleged links with the chief secretary and politicians, Reddy’s counsel B Praveen said these were only allegations. “The truth will come out during the trial. He is a very humble and polite person. He is doing credible contract jobs and sand business.”
A CBI officer, on the other hand, said, “It was not just a currency exchange racket. We are probing various angles based on information that the three arrested [Reddy, Prem Kumar and K Srinivasulu] were hoarding crores for prominent persons.”
According to the CBI’s FIR as quoted by PTI, “Reddy and his associates had, with the help of unknown public servants of different banks, converted the unauthorised cash held by them in old currency notes, thereby depriving the public in enforcing their right.”
The CBI official said they suspect these exchanges happened in the first one week of demonetisation. “Either they knew about demonetisation or they sourced new bills from multiple banks using their influence.”
From a guarded, three-bedroom apartment rented by Reddy near Andhra Club in T Nagar, I-T officials claimed to have seized Rs 88 crore including Rs 3 crore in new currency. “The bundles were kept in cartons —Rs 1 crore in each, give or take Rs 1,000 or so. These cartons were identical on all the premises,” said the officer. The T Nagar apartment also had four currency counting machines, which came in handy for the raid team.
What was more “dramatic”, according to the official, was the seizure of Rs 24 crore from Vellore. “They had moved the currency bundles into a Tata Ace van before we reached there. The van carrying vegetables along with the currency shuttled around Vellore for four hours in the night. We seized it at midnight after they parked it near a building owned by a friend of Reddy,” the official said.
“We had to force officials of a nationalised bank to open the branch at midnight to deposit the Rs 24 crore. As the new notes had different serial numbers, we suspect more than one bank had helped them.”
The official added, however, “We did not find anything from the house where he lived.” Reddy’s properties in Vellore were sealed Tuesday. The I-T official said Reddy had been under watch for a long time. “Otherwise he is seemingly a humble family man, a believer who takes his family out for shopping and to temples. But being well connected may have