Ed freezes ₹41 9 crore in fixed deposit held by t n minister ponmudy son

Ed freezes ₹41 9 crore in fixed deposit held by t n minister ponmudy son

The two were questioned by ED officers for the second day after the searches on Monday at the properties linked to them; the case involves alleged illegal issuance of licences for red sand mining.

The Enforcement Directorate (ED) said on Tuesday that it had seized ₹81.7 lakh in unaccounted-for cash and froze ₹41.9 crore in fixed deposit held by Tamil Nadu Minister for Higher Education K. Ponmudy and his son and DMK MP Gautham Sigamani.

The two were questioned by ED officers for the second day after the searches on Monday at the properties linked to them.

The case involves the alleged illegal issuance by Mr. Ponmudy of licences for red sand mining at five locations to his son, relatives, and benamis when he had served as the Minister for Mines between 2007 and 2011.

The ED alleged that the proceeds from illegal mining were deposited in benami accounts and layered through multiple transactions and accounts.

Eventually, two overseas entities — PT Excel Mengindo in Indonesia and Universal Business Ventures FZE in the UAE — were acquired.

The Indonesian company was shown to have been bought for a nominal amount of ₹41.57 lakh. It was sold for over ₹100 crore in 2022.

The ED said it was suspected that a huge amount of cash was transferred through ‘hawala’ transactions and used for the purchase of these overseas entities.

During the search operation, ₹81.7 lakh in unaccounted-for cash was seized, along with unexplained foreign currency, primarily in the British pound, roughly equivalent to ₹13 lakh, from the residence of Mr. Ponmudy, the ED said.

It said, “In order to mislead the probe, a claim that the cash belonged to a family-owned hospital was made, and an attempt to falsify accounting records to introduce cash was detected and prevented. A corroborating statement attesting these facts was obtained from one person concerned. Thus, there is no plausible explanation for this unexplained cash seized from the residence of Mr. Ponmudy.”

The ED investigation has reportedly revealed a trail of illegal proceeds from these illicit activities, which were used to acquire properties and companies, and for other investments.

Incriminating documents have been seized and were being analysed.

Further, an amount of ₹41.9 crore, identified as direct proceeds of the crime, was frozen under a provision of the Prevention of Money Laundering Act (PMLA) because it was held in the form of a fixed deposit.

The ED officers began their searches on Monday morning and it concluded in the early hours of Tuesday.