BHUBANESWAR: The Income Tax (IT) Department on Tuesday conducted simultaneous raids at multiple locations across India in connection with an alleged ₹100 crore scam involving two Odisha-based iron ore mining companies.
Sources within the IT Department confirmed that the raids targeted properties linked to MGM Minerals Limited and M/s SN Mohanty in Bhubaneswar, Rourkela, Joda, Kolkata, New Delhi, Ghaziabad, and Gurugram.
The investigation stems from findings in the 2022 Comptroller and Auditor General (CAG) report, which exposed discrepancies in the operations of at least 25 iron ore mining companies. Scrutiny of the report revealed MGM and SN Mohanty as the primary beneficiaries of the alleged scam.
According to IT Department sources, the firms reportedly misrepresented the quality of iron ore and deliberately underestimated its grade. This manipulation allowed the companies to pay lower royalty rates, resulting in significant revenue losses for the Odisha government.
"The decline in the grade of iron ore indicated that the lessees were misreporting the grade of iron ore produced in an attempt to avoid higher royalty and premium payable on higher grades," said the sources.
Further investigation revealed the involvement of MGM and SN Mohanty in hawala transactions and round-tripping of funds. Allegedly, the illicit funds were transferred to the British Virgin Islands and subsequently brought back to India.
The SN Group is accused of using these funds to establish another mining company, Kai International Private Limited. "The raids were launched at about 6 am on the day. More details about the seizures, if any, will emerge in the next few hours," added IT Department sources.