CHENNAI: The (ED) on Friday announced the provisional attachment of immovable and movable properties worth Rs 14.21 crore in connection with an illegal red earth mining case in Tamil Nadu involving family members and associates of K. Ponmudy, currently the state Higher Education Minister, and his son Dr. P. Gautham Sigamani, a former Member of Parliament (MP).
The agency has attached immovable properties held in the name of K.S. Raja Mahendran (Sigamani's brother-in-law) and his entities valued at Rs 5.47 crore and movable properties held in the name of a company 'Confluence,' which belongs to Sigamani's wife. These assets include bank fixed deposits and bank balances valued at Rs 8.74 crore.
The ED is investigating alleged money laundering and foreign exchange violations against Ponmudy, Gautham Sigamani, and their associates. This investigation relates to the issuance of red sand mining licenses to Ponmudy's son, relatives, and benami operators at five locations during his tenure as the state Minister of Mines from 2006-11.
The predicate offense for this case is an FIR registered by the District Crime Branch, Villupuram, Tamil Nadu, under sections of the IPC and the Prevention of Corruption Act, 2018, against Ponmudy, Sigamani, and others.
The ED's investigation allegedly revealed that between 2007 and 2010, when Ponmudy was the state Minister of Mines, he managed to allot five licenses in the names of Sigamani, K.S. Rajamahendran, and Jayachandran, who admitted to acting on behalf of Sigamani for quarrying red earth in patta lands.
The investigation revealed that red earth was extracted illegally beyond the permitted limits, amounting to Rs 25.7 crore. The ED's probe also indicated that the sale proceeds were invested in an overseas entity.
The agency had searched seven premises linked to Ponmudy and Sigamani in July 2023, resulting in the seizure of Rs 81.42 lakh in cash along with unexplained foreign currency, primarily in British pounds worth approximately Rs 13 lakh. The ED also froze fixed deposits worth Rs 42 crore at that time.
The ED had stated that proceeds obtained from illegal mining were deposited in benami accounts and layered through multiple transactions and accounts. Two foreign companies, one in Indonesia and another in the UAE, were acquired for a pittance and later sold for over Rs 100 crore in 2022. The ED suspects that large amounts of cash were transferred through hawala and used to purchase these overseas entities.
The companies were bought without RBI approval, contravening the provisions of the Foreign Exchange Management Act (FEMA).
The agency had also earlier attached immovable properties in the form of agricultural lands, commercial and residential buildings in Tamil Nadu, and movable properties in the form of balances in bank accounts and shares worth Rs 8.6 crore held by Sigamani under provisions of the FEMA Act, the ED had said.
