Granite Firm Owned by BRS MLA’s Brother Diverted ill-gotten Rs 300 Crore: ED

Hyderabad: Santosh Sand and Granite Supply, owned by Patancheru BRS legislator Gudem Mahipal Reddy's brother Gudem Madusudhan Reddy, indulged in irregularities by excavating and transporting quantities of material way beyond the permitted limits.

The irregularities came to the fore a day after Enforcement Directorate (ED) officials conducted raids on ten locations owned by the two brothers. ED officials stated that they have registered a case against the firm, which is based in Patancheru, under the provisions of the Prevention of Money Laundering Act (PMLA), 2002.

The agency took up an investigation based on FIRs registered by Telangana police against the proprietary concern of Madhusudan Reddy.

"The accused firm was found to have excavated and transported an excess quantity of 11,98,743 CBM of building stone and road metal within the quarry lease permitted area and 10,11,672 CBM of material beyond the permitted area (on encroached government land admeasuring 4.37 Ha). In the process, they amassed around Rs 300 crore by sale of illegally excavated material. They also evaded paying the royalty amount of Rs 39.08 crore to the government," ED officials stated.

An investigation revealed that the sale proceeds of illegally excavated material were deliberately not reported in banking transactions and books of accounts. They are suspected to have been carried out in cash, which was laundered by the accused and invested in real estate and other activities. The search operations led to the seizure of unaccounted cash of Rs 19 lakh along with many property documents in the names of unrelated persons, Who are suspected to be benamis of the accused. Mobile phones containing evidence related to cash dealings were also seized. Bank locker keys were recovered. Their examination is expected to reveal more incriminating evidence.