Three-men gang controls TN sand mines: Enforcement Directorate

Government tender conditions were manipulated to ensure that only those entities linked to these three pocketed all the contracts, the ED said.
Enforcement Directorate
Enforcement Directorate(Photo | X)

CHENNAI: As per the Enforcement Directorate’s investigation into the alleged Rs 4,730 crore river sand mining scam across 28 sites in Tamil Nadu, just three people allegedly controlled the entire sand mining business in the state. Government tender conditions were manipulated to ensure that only those entities linked to these three pocketed all the contracts, the ED said.

A Japanese sand excavator manufacturer has also told ED that all the 273 excavators sold by the company in Tamil Nadu since 2011 were bought by entities that come under a business group owned by one of these contractors. The details are part of the dossier sent on June 14 by the central agency to the Tamil Nadu Director General of Police under Section 66(2) of the Prevention of Money Laundering Act (PMLA) of 2002, sources said.

The agency alleged that state government officials colluded with these contractors to illegally mine sand over and above the quantum allowed under the contract with the government.

In its investigation conducted to probe money laundering charge, ED said all the 15 contractor companies engaged at 28 sand quarrying sites either belong to or are controlled by Shanmugam Ramachandran, K Rethinam, and P Karikalan. Their companies had won bids for all the operations, from excavating the sand to loading and moving them to the storage area, involved in sand mining. ED had attached deposits worth Rs X2.25 crore in over 35 bank accounts allegedly belonging to the three and a few others.

The agency had also relied on a deposition by Asokan Muthaiya, a former Engineer-in-Chief of the Water Resources Department (WRD), who told the ED that the 15 firms were ‘benamis’ of the three, sources, quoting the ED probe, said.

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Sand quarrying contracts given to only four entities, says ED

While WRD officials declined to comment on this, Ramachandran, Karikalan and Rethinam could not be reached for their responses. Quoting data given by the WRD, ED said the contracts for sand quarrying and conveyance at all 28 sites were awarded only to four entities allegedly linked to S Ramachandran’s SR Group.

The ED investigation also quotes Muthaiya detailing the manipulation of tenders to ensure that they are won only by these three or four entities operating under different names. The tenders are broken down into smaller ones based on either period or scope of contract so that the value of the bid was below `50 lakh. This was done to ensure that WRD can go in for physical tendering and not call for online tenders which may attract wider participation.

ED has also cited information provided by Kobelco, a Japanese sand excavator manufacturer, which said that all the 273 excavators sold by the company in TN from 2011 were bought by entities that come under a business group owned by Ramachandran. ED has provisionally attached 209 of these sand excavators worth `128.34 crore in the case.

The central agency has relied on GPS coordinates, a feature built into these excavators, and an IIT-Kanpur incubated company’s study to estimate the extent of alleged illegal sand mining across the quarries which is pegged at 23.6 lakh units over three years. About 80% of these excavators were purchased from 2020-2023 when sand mining restarted after a HC ban was lifted, the ED said.

A similar statement was given to ED by the other manufacturer, JCB India, which stated that entities belonging to Ramachandran purchased 32 excavators, sources said. The other two, Rethinam and Karikalan, are also directors or partners in some of these entities owned by Ramachandran, sources, quoting ED probe, said.

All 273 excavators sold since 2011 bought by one firm

Kobelco, a Japanese sand excavator manufacturer, told ED that all the 273 excavators sold by the company in Tamil Nadu since 2011 were bought by entities that come under a business group owned by S Ramachandran. ED has provisionally attached 209 of these sand excavators worth Rs 128.34 crore in the money laundering case

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