The Enforcement Directorate (ED) attached assets worth Rs 246 crore in Tamil Nadu’s Gutkha scam. The attached property includes 174 immovable items worth Rs 243.80 crore and moveable assets worth Rs 2.29 crore.
The attached property is spread across various locations in Tamil Nadu, Puducherry and Andhra Pradesh while movable assets include vehicles and shares. The attachment comes after the ED conducted inquiry on the FIR filed by the Central Bureau of Investigation (CBI). The CBI had, in May 2018, filed an FIR in the case based on the directions of the Madras High Court.
A press release from the ED stated that the accused – AV Madhava Rao, PV Srinivasa Rao, Tallam Uma Shankar Gupta and others -- were indeed involved in the illegal manufacture, sale and distribution of Gutkha products in Tamil Nadu and had generated a revenue of Rs 639.40 crore in 2013 and 2016, which was invested in property across the three states. “The criminal activity related to the 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 the State of Tamilnadu,” the statement reads.
The proceeds of the crime of illegal manufacture and sale of gutkha were invested in purchase of land in the names of M/s Gayathri Realtors, M/s Medha Diary Private Limited, M/s Vaijayanthi Spinners, etc. “Three factory premises were also acquired by the accused in the names of relatives / employees during the period to facilitate smooth running of their illegal Gutkha business,” the statement says.
It also mentions that the accused had purchased shares in a textile park in Guntur and vehicles to distribute gutkha products. “The major investments in real estate made by the accused were in Guntur District of Andhra Pradesh apart from investments in Salem, Puducherry and Chennai,” adds the statement.
The scam was discovered in July 2016 when Income tax officials conducted searches on the properties of a pan masala and gutkha manufacturer in Tamil Nadu for evading tax to the tune of Rs 250 crore. During the searches, a diary was seized which had names of those who had allegedly been paid off by the gutkha manufacturer. One of those names was C Vijayabaskar, the Tamil Nadu health minister. Many senior police officers and bureaucrats were named in connection with the scam including the state's Director General of Police TK Rajendran, former Chennai Police Commissioner S George, several officials in the department of Health and Food Safety and local councillors among others. The main allegation was the payoffs received by these persons from gutkha baron Madhava Rao.
In September 2018, the CBI conducted searches on the houses of DGP TK Rajendran, the ex-DGP S George, Health Minister C Vijayabaskar, former Milk and Dairy Development Minister BV Ramanaa etc. in relation to the scam.