The Enforcement Directorate (ED) has asked Bengaluru police for details of a case related to an alleged ponzi scheme in which former Karnataka minister and BJP leader Gali Janardhana Reddy, the mining baron from Ballari, is one of the accused. The ED has said it would like to examine the case since it involves possible money laundering.
In a November 9 letter to police, ED Joint Director Raman Gupta, who is stationed in Bengaluru and has signed the letter with the approval of the ED Director, said: “I am directed to request you to share the information about all the cases registered by city police against the said company and accused to examine the matter from point of view of the PMLA Act. The action taken under KPID Act may also kindly be shared with this directorate expeditiously.”
The case pertains to an alleged ponzi scheme floated by a company called Ambidant Marketing Pvt Ltd which, police said, received funds in the name of “halal investment” and offered investors returns to the extent of 144 per cent per annum.
According to the case registered by the Crime Branch of Bengaluru police against the company, Reddy and his former personal assistant Mehfuz Ali Khan accepted Rs 20 crore from the firm which duped hundreds of investors to the tune of Rs 600 crore. Police claimed the firm paid the money to settle a case filed against it by the ED.
On November 13, appearing in a Bengaluru court, Ali Khan, in an affidavit, stated that he obtained 57 kg of gold worth Rs 18 crore through Ambident Marketing Pvt Ltd to fulfil religious obligations he had undertaken to resolve personal problems in life. He claimed to have asked the owner of Ambident Marketing Pvt Ltd to purchase the gold on his behalf. He even offered to return the money.
In January this year, the ED had begun probing the company under sections of Foreign Exchange Management Act (FEMA) after receiving a reference on the company’s alleged fraud from the Income Tax department in November 2017. It conducted searches at multiple premises of the company and its owner. During the search, Rs 1.97 crore in cash was seized by the ED from the residential premises of Syed Ahmed Fareed, owner of the company. The case has already been adjudicated and the company fined Rs 1.85 crore under FEMA.
The ED was not pursuing any case against Reddy in this matter. But after the Bengaluru police mentioned him as an accused in the case, the ED asked police to provide details of the case. It objected to Bengaluru police disclosing in a press note that Reddy was trying to influence the ED probe.
“This is a matter of great concern that the press note dated 07.11.2018 issued by the office of commissioner of police in respect of scam by… Ambidant Marketing… mentions about this directorate and that accused had sought support regarding ED cases. This not only maligned the public image of this agency but also led to avoidable media speculations in the case,” the ED letter stated. It told police that they should have corroborated the facts from the ED before putting it out in the public domain.