CHENNAI : A year after the Enforcement Directorate (ED) launched its probe into the gutkha scam, under the Prevention of Money Laundering Act (PMLA), it has attached 174 immovable properties in Tamil Nadu, Puduchery and Andhra Pradesh with market value of `243.80 crore and moveable properties in the form of shares and vehicles worth Rs 2.29 crore.
An investigation conducted under PMLA revealed that accused A V Madhava Rao, P V Srinivasa Rao and Tallam Uma Shankar Gupta, promoters and directors of Jayem Group, which manufactured MDM brand of gutkha, and others, who were involved in illegal manufacture, sale and distribution of gutkha products in TN, had a turnover of Rs 639.40 crores from June 2013 to June 2016.
The money derived out of the criminal activities was invested in moveable and immoveable properties mainly in the Guntur district of AP, and in Salem, Puducherry and Chennai. These assets consisting of 174 immoveable properties and moveable properties totalling Rs 246 crore have been provisionally attached.
These properties were purchased in names of Gayathri Realtors, Medha Diary Private Limited, Vaijayanthi Spinners. Three factory premises were acquired by the accused in the names of relatives or employees in this the period to facilitate smooth running of their illegal gutkha business, said Zone-II ED Joint Director P Manikkavel. The accused used profits to purchase land in their names and in the names of family or relatives.
Crime was scheduled offence under PMLA
According to ED, the accused also purchased shares in Goutham Buddha Textile Park, Guntur and vehicles for the sale and distribution of gutkha products. The criminal activity is related to payment of bribes to the Central and State government officials as quid pro quo for allowing the illegal business of gutkha and other tobacco products, which are banned in Tamil Nadu, and is related to the scheduled offence under the PMLA. Therefore, the properties acquired by means of illegal manufacture and sale of gutkha resulting from such criminal activity were consequently liable to attachment, ED officials said.
The CBI had conducted raids at 35 locations across Chennai, Tiruvallur, Thoothukudi, Guntur (Andhra Pradesh), Mumbai and Bengaluru, including at the premises of TN minister Vijaya Bhaskar, former TN DGP TK Rajendran, former Chennai Police Commissioner S George and several other top officials of the Central Excise department, Food Safety department and Health department.
The gutkha scam came to light on July 8, 2017, when Income Tax sleuths raided offices and residences of Jayem Industries (now known as Annamalai Industries) which had been facing charges of tax evasion worth Rs 250 crore and seized diaries containing incriminating evidences linking top officials of the State.
The case further gained prominence after the Income Tax sleuths, while inspecting the Poes Garden residence of former CM J Jayalalithaa, stumbled upon letters exchanged between the Income Tax department and top bureaucrats of the State over the case in November 2017.
Interestingly, George, the then Chennai Police Commissioner, indirectly acknowledged gutkha scam but rejected allegations of receiving kickbacks from gutkha manufacturers. “There was a gutkha scam. There was some illegal activity going on and how do you expect the Commissioner to know what happens in all 300 police stations?” said George while blaming the then Deputy Commissioner Jayakumar with the Chennai Police Crime Branch for failing to bring the issue to his notice.
Probe is based on CBI FIR
ED said the accused had also purchased shares in Goutham Buddha Textile Park, Guntur and vehicles for the sale and distribution of gutkha. ED initiated its probe based on an FIR filed by the CBI. Manufacture, import, supply, distribution and sale of gutkha and other chewable tobacco, were banned in TN & Pondy in May 2013.