Rich by proxy

J Sekhar Reddy (47), who was born at Thondan Thulasi Village near Katpadi in Vellore district was not a name that the business circles often discussed in Chennai. Only a very few businessmen, who are in close touch with the power centres in the state, knew about him and his connection. Not once was his name associated with any corruption case in the state. On Thursday, the Income Tax department chanced upon a treasure trove hidden at the premises owned by Sekhar Reddy, his associates Srinivasa Reddy and Prem Reddy. By 2 pm Friday, the I-T sleuths had unearthed Rs 106.5 crore in cash and nearly 127 kg of gold bars from these premises. The department continued its raids on the homes and offices of these businessmen on Friday. 

DTNext has learnt that the elusive Sekhar Reddy started his career as a small- time contractor winning road and minor building contracts sanctioned through local MLA funds. His association with the MLAs brought him closer to the main power centres. Sources say Sekhar Reddy soon became a trusted benami of a senior IAS officer in the state. I-T sleuths indicated he had parked money for this bureaucrat in various parts of Tamil Nadu, Bengaluru and at Hyderabad.

“What the I-T department discovered is just a tip of the iceberg. He could be having more than Rs. 3000 crores in cash. Most of this money was provided to him by the bureaucrat who was instrumental in securing for him a member’s position at Tirumala Tirupati Devasthanam through his connections to the Tamil Nadu political circles,” a well-connected businessman, on condition of anonymity, told this newspaper. 

He also said the senior bureaucrat has another trusted benami (proxy)partner in Bengaluru and most of his money was in the custody of these two benamis. According to sources, Sekhar Reddy made good use of his connection with this senior bureaucrat. “But his main business has been sand mining, the licence for which he won through the senior bureaucrat. He promptly returned the favour by sponsoring the wedding of the bureaucrat’s daughter at Tirupati,” the source added. 

According to I-T sleuths, Sekhar Reddy and his associates Srinivasa Reddy and Prem Reddy always preferred to remain in the background. “They acted as the main funding agents for a political party. Sekhar Reddy had come to Apollo Hospital to give Tirupati prasadam to the ailing former Chief Minister,” an I-T official said. 

With his high-level connections, Sekhar Reddy also managed to invest the money provided to him by the senior bureaucrat, thereby adding to his growing income. Sources in I-T said they are now investigating the financial transactions between Sekhar Reddy and the senior bureaucrat. “We are yet to track the assets of these three businessmen in places like Bengaluru and Hyderabad. We have seized several incriminating documents during the raid and a scrutiny of these documents will be carried out once we conclude the raids,” the I-T official added. 

It is believed the senior bureaucrat had also helped him to get over Rs 10 crore old currency notes exchanged with the new Rs 2,000 denominations. “This seems to be a much bigger nexus, with involvement of bureaucrats, politicians, businessmen and bank officials. A detailed investigation is required to bring the whole case out and I-T may be transferring some aspects of the case to other investigation agencies,” the I-T official added.