How MLA Gudem Mahipal Reddy, his brother earned Rs 300 crore by cheating Telangana govt

Hyderabad: The sleuths of the Enforcement Directorate, Hyderabad Zone, have provisionally attached Rs 80 crore of Santosh Sand and Granite Supply.

The case has raised questions about how the persons involved—MLA Gudem Mahipal Reddy and his brother Gudem Madhusudhan Reddy—earned Rs 300 crore by cheating the Telangana Government.

What is the case about?

Santhosh Sand & Granite Supply, represented by its proprietor, Gudem Madhusudhan Reddy and others, have cheated the government by carrying out excess mining in the assigned quarry area.

They also carried out illegal mining in unassigned government land, thereby causing huge revenue loss to the government to the tune of Rs 39.08 crore towards royalty payable and by wrongfully earning Rs 300 crore from their illegal mining operation.

It is pertinent to note that these permissions for mining were sanctioned during the BRS government and MLA Gudem Mahipal Reddy was the party MLA.

Earlier, the Telangana Police had booked the firm and based on this FIR, and ED took up the investigation.

During the investigation, ED conducted searches which resulted in the seizure of numerous original property documents from the possession of Gudem Madhusudhan Reddy, proprietor of Santhosh Sand & Granite Supply.

Properties and their benamis

Further, investigation revealed that though these properties were in the names of different persons while the beneficial owner of these properties is Gudem Madhusudhan Reddy, who happens to be the brother of now Congress MLA Gudem Mahipal Reddy.

Examination of the purported owners of these properties revealed that they were benami of Gudem Madhusudhan Reddy.

It was further revealed that the mining license was granted by the government to Santhosh Sand & Granite Supply and they, in turn, subcontracted the same to GVR Enterprises, a partnership firm of Gudem Madhusudhan Reddy and G Vikram Reddy.

This subcontracting was not permitted in terms of the lease and moreover, no permission was taken from the government.

ED investigation also revealed that the illegally mined products were mainly sold for cash, and the Proceeds of Crime (POC) generated in this manner were further invested in properties, mostly in the names of benamis.

Accordingly, 81 such properties, valued at Rs 78.93 crore, have been provisionally attached during investigation. Further, some amounts were also due to GVR Enterprises from the purchasers of illegally mined material and these amounts also represent POC and accordingly fixed deposits of Rs 1.12 crore in the names of these entities.