Income Tax raids unearth 352 crore benami transactions

Seyyadurai Nagarajan, who heads the SPK & Co, had confessed to the investigators that he had generated the unaccounted assets by inflating his subcontract expenses and labour payments, a note from the Income Tax Department said. Sources also added that more than Rs 200 crore cash and 105 kg gold were seized in the searches. 

The final figure of the seizure and other transactions are expected to emerge only after the raids are completed in the Madurai region, where the scrutiny of the seized valuables and documents are still going on. 

The premises of the main sub-contractors, a charted accountant and a jeweller who helped to convert his unaccounted cash to gold were also searched during the operation. SPK & Co is the main firm engaged in civil construction work of highways, roads and bridges. Its sister concerns are engaged in the business of hotel, blue metal and toll ways. 

Apart from unaccounted assets, several incriminating documents in the form loose sheets, diaries, registers and hard discs were also seized during the operation. S Nagarajan had kept only Rs 24 lakh in his house and hidden the remaining cash and gold in 10 different places of his employees and associates, including their cars. 

It may be noted that Nagarajan and Subramanian Palaniswamy, father-in-law of chief minister’s son, Mithun, are directors in a company, which was also raided. For the last several years Edappadi Palaniswami had been holding the Highways and Minor Ports portfolio.

Though the SPK Group has been in the business for nearly two decades, it emerged as a top player only after the AIADMK came to power in 2011, the time when Nagarajan took over the business started by his father Seyyadurai. He expanded it with his political connections and his joint ventures included executing projects worth Rs 5000 crore in the state, sources in Highways Department said. 

Official sources also revealed that the raid has come at a time when SPK group was eyeing two big projects – Rs 12,000 crore Chennai Peripheral Road Project and Rs 3000 crore ChennaiKanyakumari Industrial Corridor. 

The Highways Department has awarded Rs 2000 crore worth “performance-based maintenance contract” in Tiruvallur, Krishnagiri, Pollachi, Virudhungar and Ramanathapuram divisions for five years to Venkatachalapathy and Co, which is a joint venture of Nagarajan and Subramaniam Palaniswami, father-in-law of Chief Minister’s son Mithun. The joint venture company also bagged the contract for the Tirunelveli – Shenkottah – Kollam Highway on design, build, finance, operate, maintain and transfer (DBFOMT) basis for 10 years with the project’s initial estimate being upwardly revised to Rs 720 crore from Rs 407.76 crore, a Highway Department official said. 

Nagarajan and Subramanian, along with sand mining baron J Sekar Reddy, who was arrested by CBI after huge seizure of gold and cash from him in December 2016, were directors in the Balaji Tollways PVT Ltd which has won the contract for Rs 200 crore Madurai Ring Road project on the build, operate and transfer basis. Nagarajan is said to be so powerful that officials in the department approach him for transfer and postings, sources added.