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Inside the 300 crore scam Involving BRS MLA Gudem Mahipal Reddy

BRS MLA Gudem Mahipal Reddy

Hyderabad: In the early morning on 2, July, 2024, BRS Patancheru MLA Gudem Mahipal Reddy was spotted at the Enforcement Directorate(ED) office in Hyderabad. He appeared before the ED officials to give his statement in an illegal mining scam amounting to whooping Rs 300 crores.The probe centers around allegations that M/s Santhosh Sand and Granite Supply, owned by Reddy’s family, illegally excavated substantial quantities of building stone and road metal, evading significant government royalties. Hyderabad Mail independently verified several official documents and brought you chronology of the scandal and shedding light on the intricate details of the unfolding scandal.

Genesis

In 2012, Department of Mines and geology, leased a quarry for building stone and road metal in Sy.No.738 of Lakdaram Village, Patancheruvu Mandal, SangaReddy District to M/s Santhosh Sand and Granite Supply. According to the lease deed the firm can conduct mining operations in 4.23 Hectares for a period of 15 years from August 8, 2012 to August 7, 2027.

However an Electronic Total Station(ETS) Survey conducted by the Revenue department pointed out that- the pit where minerals have been extracted covers an area of 4.08 hectares and falls within the leased area as per the approved Differential Global Positioning System (DGPS) map. In addition to the leased area, it was alleged that the mineral was extracted from 3.16 Hectares area which falls under encroachment.

Subsequently the Department of Mines and Geology issued a show cause notice to the firm alleging that the mineral extracted from more than the leased area and directed to submit an explanation to the show-cause notice.Meanwhile the firm knocked the doors of High court on the same.

How the scandal unraveled

On Feb 9, 2024 Panatcheru police of Sangareddy district received a petition from the Tahasildar, Patancheru mandal who was directed by the Revenue Divisional Officer, Sangareddy to file a complaint against M/s Santhosh Sand and Granite Supply. Subsequently Panatcheru police booked the firm for theft, criminal trespass, under prevention of damage to public property act(PDPPA). Further the police added cheating criminal breach of trust and several section underMines and Minerals (Development and Regulation) Act 1957

Five survey teams have been conducted survey of the quarries in Lakdaram, Chitkul and Rudraram villages and as per their report, the quarry in the name “M/s Santhosh Sand & Granite Supply located at Sy.No. 738 of Lakdaram village encroached and performing mining activities in 4.37 Hect/10.32 Acres in excess area”

As they have encroached the excess area as against the allotted land, it amounts to encroachment of government land which is a punishable offence. Subsequently requested to book a criminal case against the above quarry management, who encroached Government land unauthorizedly.

Two months after the FIR, Pantancheru police arrested Gudem Madhusudhan Reddy on March 15, 2024 and while leaving the police station premises along with the arrest to produce him in the court. Reportedly around 60 members gathered in front of the police station and damaged a police escort vehicle and injured the police personnel. Subsequently the police booked a case for rioting, unlawful assembly, wrongfully restraining the complainant and obstructing the duties of a police officer. Vikaram Reddy son of BRS patancheru MLA Gudem Mahipal Reddy is one of the accused in the case.

ED jumps into action

On June 20, 2024, Enforcement Directorate (ED), conducted raids at ten locations in and around Hyderabad in a money laundering case being investigated against M/s Santhosh Sand and Granite Supply, Patancheru under the provisions of the Prevention of Money Laundering Act (PMLA), 2002. Searches were conducted at the premises of the proprietor of the firm Gudem Madhusudan Reddy, BRS MLA Gudem Mahipal Reddy and others.

The law enforcement agency, ED, jumped into action after the case filed by the Patancheru police against M/s Santhosh Sand & Granite Supply, a proprietary concern of Gudem Madhusudan Reddy

Preliminary investigation revealed that the accused firm was found to have excavated and transported excess quantity of 11,98,743 CBM of building stone and road metal within the quarry lease permitted area and 10,11,672 CBM of material beyond the permitted area (on encroached Government land admeasuring 4.37 Ha). In the process, the accused illegally amassed around Rs. 300 crore by sale of illegally excavated material and also evaded royalty amount of Rs 39.08 crore due to the Government.

Further investigation revealed that sale proceeds of illegally excavated material were deliberately not reported in banking transactions and books of accounts and that the transactions were suspected to have been carried out in cash. ED investigation revealed that proceeds of crime in the form of cash were laundered by the accused and were invested in real estate and other activities, said ED in an official statement.

Search operations led to the seizure of unaccounted cash of Rs.19 lakh along with a large number of property documents in the names of unrelated persons who are suspected to be benamis of accused persons. Mobile phones containing evidence related to cash dealings were also seized. Bank locker keys were also recovered and examination of the bank lockers is expected to reveal further incriminating evidence. Further investigation is underway.