The ED on Wednesday searched locations in Karnataka, including educational institutions linked to state home minister G Parameshwara, as part of a probe into alleged gold smuggling-linked money laundering case against Kannada actor Ranya Rao and others, official sources said.
According to them, 16 locations in the state were raided by the agency under the Prevention of Money Laundering Act (PMLA) targeting hawala operators and accommodation entry operators who allegedly made “fake” financial transactions into Rao’s accounts.
The Enforcement Directorate filed a PMLA case a few months ago after taking cognisance of a CBI and DRI (Directorate of Revenue Intelligence) complaint into a larger gold smuggling racket in India, including the case of Rao.
The ED sources said an educational trust is suspected to have “diverted” funds and made a payment of Rs 40 lakh towards the credit card bill of Rao, allegedly on the instructions of an influential individual.
The sources claimed the trust is linked to Parameshwara and the “influential” individual is a politically exposed person. The searches found there were no supporting vouchers or documentation to “substantiate” this payment (for credit card bill payment), they said.
Meanwhile, Parameshwara has assured full cooperation with the Enforcement Directorate (ED) in its ongoing raids at the educational institutions linked to him, as part of the investigation.
Chief minister Siddaramaiah and the Congress termed the ED action “vengeance politics” against a Dalit leader even as the opposition BJP and JD(S) linked the ED searches to the gold smuggling case involving Rao.
Speaking to reporters here, Siddaramaiah described the action as “vengeance politics” of the BJP at the Centre. It was done because the institutions are run by Parameshwara, who is a tall leader of Congress and the SC community.
Congress general secretary in-charge of party affairs in Karnataka, Randeep Singh Surjewala, pointed out that Parameshwara was a tall SC leader and that the raids appeared to be a desperate attempt to cover up the corruption of previous BJP governments and stifle the voice of those who champion the cause of the oppressed.
ED sources said some hawala operators who facilitated illegal foreign exchange movement for gold procurement were searched and they reportedly “admitted” to dealings with Rao. The buyers have accepted having bought gold from her and selling it to jewellers, they claimed.
The raids also covered some persons and entities who provided accommodation entries (fake financial transactions, fake consultation income) into Rao’s accounts and have “confessed” to routing funds to her accounts, without any genuine business transactions, they said.
In one case, the sources said, one of the companies has shown Rao to be a “supplier” of construction labour and paid her few crores of rupees. Similarly, she has done “money laundering” through other companies as well, they claimed.
Some entities who undertake illegal forex business (without RBI approval) have also been found during the searches.
Rao and co-accused Tarun Kondaru Raju were granted bail on Tuesday by a special court for Economic Offences in Bengaluru in connection with the gold smuggling case.
The court approved their default bail applications after the DRI failed to file a chargesheet within the stipulated period. Rao, however, will continue to remain behind bars.
Authorities have filed a separate case against her under the stringent Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (COFEPOSA), a preventive detention law designed to tackle smuggling and preserve foreign exchange reserves.
Under COFEPOSA, individuals can be held without trial for up to a year based on suspicion of involvement in such activities.
Rao was arrested on March 3 at the Kempegowda International Airport in Bengaluru after arriving from Dubai. Acting on a tip-off, DRI officials detained her and seized gold bars weighing 14.2 kg and valued at over Rs 12.56 crore.
Also read: ED searches at educational institutions linked to Karnataka home minister