Two days ago, police in Bengaluru arrested former BJP minister and Bellary strongman G Janardhan Reddy who, along with his aide, has been accused of accepting Rs 20 crore from a financial firm which duped hundreds of investors to the tune of Rs 600 crore. Police said the firm paid the money to settle cases filed against it by the Enforcement Directorate. And now, Reddy’s aide has offered to return the Rs 20 crore, claiming he had only borrowed the money from the financial firm. In a sworn affidavit presented to a magistrate during the course of a bail hearing for Janardhan Reddy, his former personal assistant Mehfuz Ali Khan made the offer to return the money to the owners of Ambident Marketing Pvt Ltd. Ali Khan is accused by police of being the conduit for the Rs 20-crore deal struck in March 2018 by Ambident Marketing Pvt Ltd owner Syed Ahmed Fareed and Janardhan Reddy to allegedly settle ED cases.
Appearing in the court of the First Additional Chief Metropolitan Magistrate in Bengaluru Tuesday morning during the hearing of Janardhan Reddy’s bail petition, Ali Khan, in his 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.
Meanwhile, in a remand application seeking police custody of Janardhan Reddy, the Crime Branch said that Reddy accepted the fact that Ali Khan had received 57 kg of gold from Ambident Marketing and that he offered to get his aide to return it to the firm to repay depositors cheated by the firm.
The Crime Branch said Reddy held a meeting with firm owner Syed Ahmed Fareed at a five-star hotel earlier this year and, according to Fareed, demanded Rs 25 crore to settle a case filed against the firm with the Directorate of Enforcement. According to police, Fareed offered to pay Rs 20 crore and Reddy demanded the payment in the form of gold.
The Crime Branch remand application stated that Fareed transferred Rs 18 crore from his bank accounts in four tranches through the month of March 2018 to a jewellery firm in Bengaluru called Ambika Sales Corporation for the purchase of gold, and the gold purchased with money from Ambident was later transported by Ali Khan to the Rajmahal Fancy Jewellery store in Bellary. A separate amount of Rs two crore was also allegedly transferred to a Reddy aide by Fareed.
Sources in the Crime Branch said the gold received from Ambident was liquidated and it is suspected that the funds were used in all probability during the May Assembly elections in Karnataka. The sources said they had found no evidence of any payment made to the ED through Reddy although Ambident’s Fareed told the police that he paid Ali Khan and Reddy to settle a ED case against him.
Reddy’s lawyers, while seeking bail Tuesday, argued that the former minister was not involved in the cheating of depositors by Ambident Marketing Pvt Ltd and that he had offered to help return the money taken by his aide. The court will pass orders on bail Wednesday.
The ED has stated that it imposed a penalty of Rs 1.86 crore on the firm earlier this year for alleged violation of the Foreign Exchange Management Act.
The ED’s Bengaluru office has stated that it conducted searches on Ambident Marketing Pvt Ltd on January 4-5 this year after receiving information from the Income Tax Department through a letter dated November 13, 2017 that Ambident Marketing Pvt Ltd was involved in forex trading. The ED probe found FEMA violations.
Based on a complaint filed on February 2, 2018 “the matter was adjudicated by the Joint Director and penalty to the tune of Rs 1.86 crores was recovered. The cash in INR to the tune of Rs 1.97 crores recovered during the search was confiscated under Section 13(2) of the FEMA,’’ the ED said last week.
The ED probe into Ambident Marketing revealed that the company received a total investment of Rs 954 crore from depositors under various schemes since its inception on December 20, 2016. “ED has written to the RBI to have a relook into the matter and protect the interest of the investors/depositors at large who are being duped in the name of Islamic banking/halal investment,’’ the ED said on November 8 in an official statement.