ED and I-T sleuths raided the house of TRS Minister Gangula Kamalakar. (Supplied)
A concerted crackdown in Telangana by central agencies, which began on Monday with a swoop on infrastructure firm Salarpuria Sattva Group hours after the Munugode bypoll results, expanded on Wednesday, 9 November, to include the residence of Civil Supplies Minister Gangula Kamalakar and premises linked to his relatives.
The raids on companies of Kamalakar and his relatives, by both Enforcement Directorate (ED) and Income Tax (I-T) officials, are said to be related to the the granite companies owned by them or their proxies which have allegedly been violating FEMA regulations.
Complaints about such violations were made in 2019 by BJP state chief and MP Bandi Sanjay Kumar in a letter to Union Finance Minister Nirmala Sitharaman, and by former BJP national executive member Shekar Rao Perala to the CBI, among others
The ED said on Wednesday that its raid on the Salarpuria Sattva Group, which is primarily involved in commercial projects and is believed to be close to the ruling TRS in Telangana, had resulted in the seizure of about ₹29 lakh in cash and foreign currencies of an unspecified amount.
The ED said it had also frozen as many as 316 bank accounts with a cumulative balance of ₹49.99 crore. It said the raid was conducted under the Prevention of Money Laundering Act (PMLA).
The crackdown is being widely seen in political circles as a means to squeeze the funding sources of the party ahead of next year’s Assembly elections.
Separate ED and I-T teams, comprising about 20 officials in total, were involved in the raids on Minister Kamalakar and his associates and relatives in Hyderabad and Karimnagar in the mattter related to Foreign Exchange Maintenance Act (FEMA) violations by the their granite mining firms.
The companies raided included Swetha Agency, Mahaveer, and SVR Granites, in Karimnagar.
The officials broke the locks of the house of Gangula Kamalakar to gain entry. It is said that Kamalakar is abroad. The officials also searched the house of Kamalakar’s brother Venkanna.
The companies in which the ED and IT officials made searches included eight companies on whom the ED had served notices in the past for clarifications on allegations of FEMA violations.
It is suspected that the ED had acted on the complaint BJP’s Bandi Sanjay had lodged with Union Sitharaman on July 31, 2019, alleging fraud in the mining agencies with the connivance of the ruling TRS in Telangana. Shekar Rao Perala had written to the CBI with similar allegations.
In his letter to the Union finance minister, Bandi Sanjay said that there was no collection of seigniorage from the companies which works out to a whopping ₹749 crore, including penalty, which is five times more that the seigniorage payable to the government.
The actual seigniorage to be paid to the government by these agencies was ₹124 crore.
The fraud, he said, was committed while transporting granite blocks through goods trains to the sea ports in places including Kakinada and Chennai.
He said that after a thorough verification of the transit forms, the assistant director of Mines and Geology Department (Vigilance), Rajahmundry, found that the blocks which were lying in the seaport had no documentary evidence.
The officials also noticed variations in the stock that was actuallly transported and what was shown officially. These grave irregularities had been thoroughly investigated by the vigilance department of the Mines Department, Rajahmundry, and issued notices to all the quarry agencies concerned.
Bandi Sanjay alleged that the Telangana government had deliberately not collected the normal plus five times penalty seigniorage from the granite agencies as most of the agencies were apparently either operated or owned by the ruling party leaders and followers.
