Bengaluru Central Crime Branch arrested former Karnataka BJP minister G Janardhan Reddy in connection with Ambident Group alleged bribery case on Sunday. It also arrested a close aide of Reddy, Ali Khan.
Reddy remained elusive for three days when he appeared before the police in connection with an alleged ponzi scam, and denied the allegations as a “political conspiracy”.
“We have taken the decision to arrest him on the basis of credible evidence and witnesses statements. We will produce him before the magistrate. We are going to recover the money & give it to the investors,” Alok Kumar, Additional Commissioner of Police, Central Crime Branch, Bengaluru told the mediapersons.
We have taken the decision to arrest him on the basis of credible evidence and witnesses statements. We will produce him before the magistrate. We are going to recover the money & give it to the investors: Alok Kumar, Additional CP, Central Crime Branch, #Bengaluru pic.twitter.com/0MvDauU8mO
— ANI (@ANI) November 11, 2018
The CCB had launched a hunt for him since Wednesday in connection with a money transaction worth crores of rupees, allegedly linked to a ponzi scheme. It was also on the lookout for Reddy’s close aide, Ali Khan, who had allegedly struck a Rs 20-crore deal with Syed Ahmed Fareed of Ambidant Marketing Pvt Ltd to bail him out from the Enforcement Directorate investigation.
ED slaps fine of Rs 1.86 crore on a private firm; Bengaluru police say firm paid Janardhan Reddy to ‘end’ case
In a series of developments, the Enforcement Directorate (ED) had imposed a penalty of Rs 1.86 crore on a private firm for violating Foreign Exchange Management Act (FEMA) rules. The ED penalty came at a time when an investigation was underway against the said firm by the Bengaluru Police in a cheating case.
The Bengaluru Police was probing the firm for allegedly paying former Karnataka BJP minister G Janardhan Reddy Rs 20 crore to “end” an ED case registered against the firm in early 2018. In its investigation, the police found that the owners of a private firm – Ambident Marketing Pvt Ltd – transferred Rs 20 crore (Rs 18 crore in gold and Rs 2 crore in cash) in 2018 to Reddy to allegedly end ED investigations against it. The owners were also accused of duping hundreds by offering huge interest on deposits, The Indian Express reported.
On the basis of information received by the Income Tax Department in Bengaluru through a letter dated November 13, 2017, that Ambident Marketing Pvt Ltd was involved in forex trading, the ED’s Bengaluru office conducted searches at locations linked to the firm on January 4 and 5, 2018.
Many FEMA violations including forex trading to the extent of $66,214, the opening of accounts abroad by a resident Indian without the permission of RBI and incorporation of a firm in Dubai without prior approval of the RBI, came to the fore during the investigations into the matter, the ED stated in response to Bengaluru Police Central Crime Branch (CCB) claims that Ambident approached Reddy to sort its ED case.
Based on a complaint filed in February, the matter was adjudicated by the Joint Director and penalty to the tune of Rs 1.86 crores was recovered. The cash in INR to the tune of Rs 1.97 crores recovered during the search was confiscated under Section 13(2) of the FEMA, the ED reportedly said.
The ED investigation into Ambident Marketing revealed that the company received a total investment of Rs 954 crore from depositors under various schemes since its inception in December 2016.
Former BJP minister Janardhan Reddy was under the ED’s scanner between the period 2012 and 2017 when the agency ordered the confiscation of assets worth Rs 884 crore for money laundering from illegal mining. However, the Karnataka High Court quashed the case on technical grounds in March 2017.
The ED’s submission against Ambident Marketing came after the Bengaluru Police Commissioner T Suneel Kumar had on November 7 said that Reddy had gone missing even as the CCB police in the city were trying to find and question him on his association with Ambident and CCB findings that Reddy was paid Rs 20 crore to dodge the ED case.
In response to a CCB notice, Janardhana Reddy walked into the CCB office on Saturday with his lawyer Chandrasekhar and claimed that he will cooperate with authorities. Ahead of his visit to the CCB office, Reddy had issued a statement, saying that he was not linked to Ambident Marketing Pvt Ltd and that his lawyers advised him to await a CCB notice before presenting himself for questioning.
The CCB police stumbled on Reddy’s role while probing a May 29, 2018, cheating case against Ambident Marketing Pvt Ltd in Bengaluru for defrauding scores of people of their deposits after promising up to 40 per cent interest on investments, Bengaluru police commissioner said.
According to police, Ambident’s activities have revealed that its owner Syed Ahmed Fareed cheated over 15,000 people to the tune of over Rs 600 crore. The CCB has allegedly found pictures of a meeting that Fareed held with Reddy in a hotel in Bengaluru in March.
Further inquiries with Fareed and his son Afaq, who was also at the meeting, revealed that Reddy’s help had been sought by the promoters of Ambident to allegedly end investigations launched by the ED. According to its findings, Reddy sought Rs 20 crore in the form of gold to help Fareed.
So far, the CCB probe has found that Fareed approached Reddy through two intermediaries — Mehfuz Ali Khan, a former personal assistant to Reddy, who is also accused of illegal mining, and Brijesh Reddy, a contractor known to Fareed. Based on their negotiations Fareed is alleged to have transferred Rs 18 crore to a jewellery firm in Bengaluru, named Ambika Jewels Corporation, for the purchase of a whopping 57 kg of gold. Fareed also allegedly paid Reddy Rs 2 crore in cash.
The gold was then allegedly shifted from Bengaluru to Bellary by Ali Khan and was parked with a Bellary jeweller Ramesh K of Rajmahal Fancy Jewellers, who is associated with Reddy.
The CCB claimed that it had found receipts for the gold purchased from Ambika Jewels Corporation by Fareed but was yet to ascertain the location of 57 kg of gold moved to Bellary, despite arresting the Bellary jeweller Ramesh several days ago.
Reddy and Khan, who allegedly played key roles in the disappearance of the Rs 20 crore worth of gold and cash went underground when they got wind of the probe following the jeweller’s arrest several days ago, the CCB officials said. The probe was delayed on account of the Lok Sabha bypoll in Bellary at the instance of the Chief Minister who said it would affect the polls, a prosecutor in the case told The Indian Express.
A day before the Lok Sabha poll results on November 5, Reddy’s aide Khan obtained anticipatory bail in connection with the Ambident Marketing Pvt Ltd cheating case. Janardhan Reddy had filed three different petitions on Friday to counter the CCB claims.
Reddy filed an anticipatory bail plea in a sessions court, seeking bail on the ground that the other accused in the cheating case — Fareed, Afaq, the jeweller Ramesh, and Ali Khan — had been granted bail. He also approached the Karnataka High Court with a regular bail plea and filed a writ petition against the Bengaluru Police Commissioner T Suneel Kumar and CCB officials over the police probe.
In their bail plea in the HC, Reddy and Khan have stated that they were not connected in any way with the activities of Ambident Marketing Pvt Ltd and that they had been dragged into the investigations with a political agenda.
The court is expected to take these pleas on Monday.