CHENNAI: The shocking raids on chief secretary P Rama Mohana Rao on Wednesday morning is believed to be the aftermath of the crackdown on sand mining baron Shekar Reddy, an influential figure in Tamil Nadu who is now on the dock after the seizure of crores of rupees and gold few weeks ago.
Sources in the Income Tax department said it has widened the net by probing the links of chief secretary Rao and State Environmental Impact Assessment Authority officials by conducting simultaneous searches in 10 locations in Tamil Nadu, Bengaluru and Chittoor.
Incidentally, Rao, who was the first secretary in late Chief Minister J Jayalalithaa's CMO, is to retire next September.
Reddy had come to public attention with the seizure of Rs 130 crore in cash (Rs 34 crore in new currencies issued after demonetisation) and 177 kg of gold from his premises. Reddy, a Tirumala Tirupati Devasthanam member before being expelled after the raids, is believed to be close to politicians and bureaucrats. His firm JSR Infra Developers is a 'Class One Contractor' for Tamil Nadu, a coveted ranking that's mandatory to take up the big infrastructure projects funded by the state.
The company is executing a variety of projects funded by World Bank. It's clients include Public Works Department, state highways department, Tamil Nadu Road infrastructure Development Corporation and other government agencies.
Sources said the role of SEIAA, which gives license for sand mining is also being probed as Income Tax has also conducted raids on the officials to probe the link of officials to sand mining baron.
The case had gained prominence after Central Bureau of Investigation and Enforcement Directorate have also been roped in to probe the link of banks in providing demonetised currency to Shekhar Reddy. The CBI has filed a First Information report against Shekar reddy following which Enforcement Directorate had booked Reddy, and his associates K Srinivasulu and Premkumar.
An Enforcement Directorate official confirmed to Express that investigation is currently on against Reddy under Prevention of Money Laundering Act. It has been learnt that the ED is also looking at the pattern of cash flow from the Reserve Bank to the mining baron by checking the serial numbers of the seized new currencies with RBI.
Sand mining in the state is allegedly controlled by people close to bureaucrats and state politicians. The sand mining baron is alleged to have brought sand from government mines which are the cheapest. The profit is maximised by under-reporting the quantum of sand taken from the mine.
The sand is then sold to builders and others at a much higher rate, without any receipt. This not just increases the income, but also evasion of taxes that run to several crores every year.