Day After Raid, TN Contractor 'Confesses' he Siphoned Money Out of Contract Payment From Govt

New Delhi: When a team of nearly 200 sleuths from the Income Tax Department raided a Chennai-based Infrastructure company in the early hours of July 16 even the IT Department did not know that they are going to make the biggest ever cash seizure in the history of the organization.

At the time of filing this copy, the Income Tax Department had already seized Rs 163 cr unaccounted cash and over 100 kg of bullion.

The owner of the company, Nagarajan Seyyadurai, is supposed to be close to the current dispensation in Tamil Nadu and had many infrastructure and civil construction contracts in his kitty.

Sources, in the IT Department reveal that money was being siphoned out of the contract payments from the Tamil Nadu government by issuing fake receipts against expenditure.

Nagarajan Seyyadurai has also admitted before the tax authorities that he was generating this cash by inflating his sub-contract expenses and labour payments.

Data from the Registrar of Companies show that the companies associated with Nagarajan Seyyadurai include Sri Balaji Tollways (Madurai) Pvt Ltd., Spkandco Expressway (P) Ltd. & SPK Spinners (P) Ltd.

Interestingly, the father-in-law of the son of the current Chief Minister is also a director/shareholder in at least two companies of Nagarajan Seyyadurai.

The Relationship

The current Chief Minister Edappadi K Palaniswami’s son Mithun Kumar is married to the daughter (Divya) of Subramaniam Palanisamy. Subramaniam Palanisamy is Director in at least two companies associated with the Nagarajan Seyyadurai.

Though there is a direct relationship, the Income Tax Department has denied the search being political in nature. A source in the department has confirmed that only SPK Spinners and its directors have been searched on a specific intelligence input.

Nagarajan Seyyadurai had not kept this cash in his house. Only Rs 24 lakh was recovered from his residence. He had parked most of the cash in ten other locations belonging to his employees and two BMW cars.

The IT Department had also searched, the main Sub-Contractor, Chartered Accountant and the Jeweler who had converted this unaccounted cash into gold. Apart from un-accounted assets (cash & gold), several incriminating documents in the form of loose sheets, diaries, registers and hard discs have also been seized.