Enforcement Directorate set to register ECIR into Gali’s mining scam

By Shivakumar G Malagi On the lines of joint probe on YSR Congress Party chief and Kadapa MP Y.S.Jaganmohan Reddy’s illegally amassed wealth; the Enforcement directorate and the Central Bureau of Investigation (CBI) have joined forces to investigate the illegal mining and money laundering charges on the Gali Janardhana Reddy and his associates. Attachment of their massive properties would begin almost immediately after registering of a case. The Enforcement Directorate (ED) is all set to register an Enforcement Case Information Report (ECIR) which was nothing but a FIR, in next couple of weeks into the money laundering acts of the Janardhan Reddy and associates in the mining ore business in both Karnataka and Andhra Pradesh. A law officer of ED based at Bengaluru has on Wednesday sought permission of the special court for CBI cases to record the statement of Janardhan Reddy lodged in Parappana Agrahara central prison jail and also filed an application before the CBI court judge B M Angadi seeking to direct CBI to provide certified copies of FIR, charge sheet and statements recorded pertaining to Associated Mining Company’s case to the ED to facilitate registering an ECIR. Earlier in March, ED Hyderabad wing had accessed certified copies of FIR, charge sheet and statements recorded by the CBI in OMC case. Then, it was expected that ED would proceed in registering ECIR against Gali and associates. “Registering a case against Janardhan Reddy by ED was delayed for few months, since the ED wanted to investigate money laundering angle of Reddy’s mining scam clubbing both cases of AMC and OMC and was waiting for the CBI to file charge sheet in AMC case too”, said a top source. CBI has filed charge sheet in AMC case on 30th May reportedly estimated the loss to exchequer at Rs 480 crore, while, in Obulapuram case, CBI estimated loss at Rs 5100 crore to state’s exchequer in the chargesheet filed in December last year. However, sources said during an Income Tax raid on Reddys and more than 80 associates in four southern states in August 2010, the officials stumbled upon documents that showed that the Reddy brothers had reportedly invested immeasurable wealth parked in tax havens.

The CBI and ED sources say that Gali brothers, allegedly laundered money by using benami companies, bogus loans, creditors, investors and foreign capital, especially by inflating the balance sheet and profit and loss accounts of individuals and companies in the corporate group.

 “ED has prepared its own report on the Gali Reddy’s illegal mining case sharing information with CBI and Central IT department. The ground work has been done and the final nod (from Union Finance Ministry) is awaited (for registering a case),” a source said.

Once the ED gets the nod from the higher-ups to register a case, the Gali Reddy and associates will be booked under section 3 of the PMLA (Prevention of Money Laundering Act) which says whoever directly or indirectly attemps, assists or knowingly is involved in any activity connected with proceeds of crime and projects it as untainted money, shall be guilty of the offence of money laundering.