Rs 200 crore cash, 105 kg gold seized in IT raids at road contractor close to AIADMK

The income tax department has seized Rs 200 crore in cash and about 105 kg of gold and detected Rs 350 crore benami transaction from the raids conducted at multiple places connected to civil construction firm SPK Group of Companies promoter S. Nagarajan.

Nagarajan is also a business partner of Tamil Nadu chief minister Edappadi K Palaniswami’s close relatives.

Nagarajan’s company is the major road contractor in Tamil Nadu and has won the contract for several road projects worth thousands of crores over the last seven years.

Palaniswami has been holding the highway department portfolio since 2011 even after assuming charge as chief minister in February last year.

The IT sleuths continued the searches for the second day in a row on Tuesday in over 30 locations in Chennai, Madurai and Aruppukottai.

“Apart from the unaccounted assets, several incriminating documents in the form of loose sheets, diaries, registers and hard discs were also seized. He (Nagarajan) had kept cash of only Rs 24 lakh in his house and parked the remaining cash and gold in 10 different places of his employees and associates including in two BMW cars,” said IT department statement.

The searches were also conducted at the premises of the main subcontractors, the chartered accountant and the jeweller who had covered the cash into gold.

Who is Nagarajan?

Sources in highways department told DNA that though the SPK group were into the road contract business for close to two decades, they emerged as a top player only after the AIADMK came to power in 2011 and Palaniswami become the highways minister in late Jayalalithaa’s cabinet. Nagarajan running the business started by his father Seyyadurai and expanded it with his political connection.

Sources said Nagarajan’s construction firm and his joint ventures were executing projects worth Rs 5,000 crores in the state. The official said that the raid has come at a time when SPK groups were eyeing at Rs 12,000 crore Chennai Peripheral Road Project and Rs 3,000 crore Chennai-Kanyakumari Industrial Corridor.

The highways department has awarded Rs 2,000 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 P Subramaniam, father-in-law of chief minister’s son Mithun. The joint venture company also got the contract for the Tirunelveli – Sengottai – Kollam highway on Design, Build, Finance, Operate, Maintain and Transfer (DBFOMT) basis for 10 years with the project’ss 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 during demonetisation 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. 

DMK Rajya Sabha MP RS Bharathi last month had given a complaint to the DVAC alleging corruption in the awarding of the highways contract project and specifically mentions contracts awarded to Nagarajan’s firm and chief minister’s relatives.

DMK working president MK Stalin questioned the silence of Chief Minister Palaniswami after the IT search and seizure of huge amount of cash and gold from road building contractors who bid for state government road projects. He demanded the resignation of Palaniswami to ensure a proper investigation and sought the cancellation of all contracts given to companies promoted by Seyyadurai and the kin of Palaniswami who is also into road construction business.

Former union minister and PMK leader Anbumani Ramadoss said there should be a multi-agency probe involving the Enforcement Directorate and the Central Bureau of Investigation (CBI) following the IT search and seizures.