Income Tax Department Building. (Express photo by Vasant Prabhu) Income Tax Department Building. (Express photo by Vasant Prabhu)

In a big breakthrough, the Income Tax department on Thursday busted a money exchange racket operating from Chennai. The IT officials raided eight locations in Tamil Nadu capital and seized Rs 90 crore in cash, of which 70 crore are new notes, and 100 kgs of gold seized, according to sources.

The I-T department also questioned businessmen Sekar Reddy, Srinivasa Reddy and Prem in this regard.

WATCH VIDEO | Income Tax Department Seizes 100 kgs gold, Rs 70 crore In New Currency In Chennai

IT raid at eight locations in Chennai including in Anna Nagar and T Nagar pic.twitter.com/lnrbNEIs2m — ANI (@ANI_news) December 8, 2016

Sekar Reddy is a contractor undertaking many projects of the public works department. His agent has allegedly been involved in changing gold bars to currency. The officials are analysing the documents seized during the raids.

The department has been acting on specific information when exorbitant amount of old notes are being changed to new ones after the announcement on demonetisation.

In the raid, Rs 80 crore was in old demonetised currencies and Rs 10 crore in newly-introduced Rs 2,000 denomination. The teams also seized 100kg gold bars worth Rs 30 crore.

The sleuths got a tip-off about Prem exchanging old currencies for gold bars, and following his trail they stumbled upon the Reddy associates. They seized Rs 6 crore in newly introduced Rs 2,000 denomination from the house of Shekhar Reddy in T. Nagar.

Reddy is well connected to many bigwigs and was involved in sand quarrying across the state in the last few years. Sand quarrying is a major money spinner for contractors, who make a margin of Rs 5,000-6,000 per load. It is estimated that more than 50,000 loads of river sand is quarried in the state daily.

Reddy had visited Apollo Hospital on October 12 to hand over Tirupati ‘prasadam’ to former chief minister J Jayalalithaa who was admitted there then.

Earlier on Wednesday, over Rs 1.75 crore were seized and eight people were arrested in raids at different places by the police and the CBI.

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