CBI Alleges Sasikala Used ₹450 Crore in Old Notes to Buy Sugar Mill During Demonetisation
The CBI has filed an FIR alleging that V.K. Sasikala, a close aide of former Tamil Nadu Chief Minister J. Jayalalithaa, paid ₹450 crore in demonetised currency to purchase a sugar factory in 2016. The charge emerged from a probe into a ₹120 crore bank fraud case against Padmaadevi Sugars Limited. According to the FIR, documents seized by the Income Tax department show the cash payment was made for the benami purchase of the factory, with Sasikala as the beneficial owner.
Unpacked:
The use of demonetised currency is significant because, after the 2016 demonetisation, old high-denomination notes were no longer legal tender. Transactions using such notes were illegal, suggesting possible attempts to launder unaccounted cash or bypass financial regulations during a period of strict monetary controls.
A benami purchase refers to property bought in another person's name, with the real beneficiary concealed. This is illegal in India under the Prohibition of Benami Property Transactions Act, 1988, as it is often used to hide illicit wealth or evade taxes.
If found guilty of violating the Benami Act or engaging in illegal cash transactions, Sasikala could face imprisonment, heavy fines, and confiscation of the property. However, current reports state that she is not yet named as an accused in the FIR, so prosecution is not guaranteed at this stage.
Padmaadevi Sugars Limited defaulted on a loan, resulting in an outstanding amount of ₹120.84 crore to Indian Overseas Bank. The account was declared fraudulent in 2020, and the sugar factory used as collateral was attached by the Income Tax department during investigations into benami transactions.