TN Gutkha scam: ED attaches assets worth Rs 246 crore

The Enforcement Directorate on Monday said it has attached assets worth more than Rs 246 crore in connection with its money laundering probe into the gutkha scam in Tamil Nadu.

A provisional order for attachment of 174 immovable properties in Tamil Nadu, Puducherry and Andhra Pradesh, of the promoters of a gutkha (a concoction of tobacco and pan masala) company, has been issued under the Prevention of Money Laundering Act (PMLA), the federal probe agency said in a statement.

While the market value of the immovable assets is Rs 243.80 crore, shares and vehicles worth Rs 2.29 crore have also been attached, it said.

The total value of the latest attachment is Rs 246.09 crore.

Probe revealed, the agency said, that A V Madhava Rao, P V Srinivasa Rao, Tallam Uma Shankar Gupta and others allegedly undertook illegal manufacture, sale and distribution of gutkha products in the state and had a turnover of Rs 639.40 crore between June 2013-June 2016.

The three are promoters of a company, Jayam Industries, which manufactured MDM brand gutkha.

The ill-gotten money derived out of this criminal activity was invested in moveable and immoveable properties in Andhra Pradesh, Puducherry and Tamil Nadu by the accused, the ED statement said.

The criminal activity relates to the "payment of bribes" to central and state government officials as quid pro quo for allowing the illegal business of gutkha and other tobacco products which are banned in Tamil Nadu, it said.

The ED had filed a criminal complaint in the case after taking cognisance of a CBI FIR.

The Madras High Court had last year ordered a CBI probe into the multi-crore gutkha scam, allegedly involving a Tamil Nadu minister besides a former and a serving top police official.

The scam came to light on July 8, 2017, when Income-tax department sleuths raided the godown, offices and residences of a pan masala and gutkha manufacturer in Tamil Nadu, who had been facing charges of tax evasion to the tune of Rs 250 crore.

The manufacture, storage and sale of the chewable forms of tobacco, including gutkha and pan masala were banned by the Tamil Nadu government in 2013.

The agency said its probe revealed that investments made by the accused were in lands purchased in the name of Gayathri Realtors, Medha Diary Private Limited, Vaijayanthi Spinners among others and it was "sourced" through cash generated out of the sale proceeds of the illegal gutkha business.

Three factory premises were also acquired by the accused in the names of relatives or employees to facilitate smooth running of their illegal gutkha business, the ED alleged, saying personal investments were made by the accused from illegal profit.

"Besides, shares were purchased in Goutham Buddha Textile Park, Guntur and vehicles were purchased for the sale and distribution of 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," the ED charged.