ED probe uncovers Rs.300 crore illegal mining scam, attaches Congress MLA’s brother’s assets

The Enforcement Directorate has attached properties worth Rs 80.05 crore in Hyderabad under PMLA in a probe into illegal mining by Santhosh Sand and Granite Supply, linked to Congress MLA Gudem Mahipal Reddy’s brother. Investigation is ongoing

Hyderabad: The Directorate of Enforcement (ED), Hyderabad Zonal Office, has provisionally attached several immovable and movable properties worth Rs 80.05 crore under the Prevention of Money Laundering Act (PMLA), 2002, in connection with an ongoing investigation into alleged illegal mining by Santhosh Sand and Granite Supply, a company that the agency said belonged to Gudem Madhusudhan Reddy, brother of Patancheru MLA Gudem Mahipal Reddy of the Congress.

In a statement here, the ED said it launched the probe on the basis of FIRs filed by Patancheru Police, which stated that Santhosh Sand and Granite Supply, represented by proprietor Gudem Madhusudhan Reddy and others, cheated the government by conducting excess mining in the assigned quarry area and also carrying out illegal mining in unassigned government land. The activity allegedly caused a loss of Rs 39.08 crore towards unpaid royalty and wrongful enrichment to the tune of Rs 300 crore through the illegal mining operations.

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Searches conducted by the ED resulted in the seizure of numerous original property documents from the possession of Madhusudhan Reddy. According to investigators, though the properties were in the names of several individuals, the beneficial ownership pointed to Madhusudhan Reddy. Examination of purported owners indicated that most were benamis of the accused, it said.

The investigation further revealed that the mining licence had been granted to Santhosh Sand and Granite Supply, which later subcontracted the operations to GVR Enterprises, a partnership firm of Madhusudhan Reddy and G Vikram Reddy, without government approval and in violation of lease conditions. The ED found that illegally mined material was largely sold for cash, and the proceeds of crime were used to acquire properties in the names of benamis.

A total of 81 such properties, valued at Rs 78.93 crore, have been provisionally attached. ED officials noted that a portion of the proceeds had also moved to GVR Enterprises from purchasers of illegally mined material, and fixed deposits worth Rs 1.12 crore in the names of involved entities were also attached.

Further investigation is in progress, according to the ED release.