On April 24, the Income Tax sleuths started the raids in over 50 locations connected to G Square Realtors, including Chennai, Trichy, Coimbatore, Bangalore, Mysore and Bellary.
Close on the heels of Tamil Nadu (TN), BJP president K Annamalai released files detailing the properties owned by Dravida Munnetra Kazhagam (DMK) members. He released “DMK files” alleging the corruption and named G Square firm.
Annamalai alleged that the DMK received “kickbacks of Rs 200 crore” from an MNC through two shell firms. He also said that the sum was used by “TN Chief Minister M K Stalin as the 2011 election fund for DMK”. He said he would complain to the CBI, seeking a probe into the matter. Annamalai had also accused the state Housing Department of approving G Square’s projects at an unusually rapid pace, especially three projects in Coimbatore, Egattur in Tamil Nadu’s Chengalpattu district, and Neelankarai in Chennai, a claim denied by state Housing and Urban Development Minister S Muthusamy.
DMK has sent a legal notice to Annamalai seeking Rs 500 crore damages besides deleting his press conference on social media platforms. Annamalai, in his reply, refused to apologise and sought Rs.501 crores from DMK for the accusation it had levelled against him. CM Stalin’s son and minister, Udhaya Nidhi Stalin, and former union minister TR Baalu also send separate notices to Annamalai individually. DMK supporters dared the Annamalai and centre, if the charges levelled have a basis, let them order IT, Enforcement Directorate (ED) raid and CBI probe.
G Square firm is said to have close links with DMK. The IT searched the residence of Praveen, a cousin of TN CM Stalin’s son-in-law Sabareesan, in the State. It also searched DMK MLA Mohan and his son Karthik’s residence (one of the shareholders in G Square) in Chennai’s Anna Nagar, G Square Bala (another partner), Auditor Shanmugam’s residence at Anna Nagar, G Square offices at Chennai’s Chetpet, Alwarpet, as well as Coimbatore and Trichy were searched.
What prompted the IT to swing into operation was an audio that was leaked on social media. An audio clip alleged to be that of Tamil Nadu Finance Minister Palanivel Thiagarajan (PTR) has surfaced on social media. He accuses MK Stalin’s family members of making more money in one year than they’ve made during their lifetime. A delegation of Tamil Nadu BJP leaders met Governor R N Ravi on April 23, asking for an inquiry into the red tape.
According to sources in the IT, they had then received a tip-off about income suppression and money being routed to evade taxes. It also alleged that G Square had aggregated land for big corporates to set up manufacturing plants and IT parks in Tamil Nadu. “The company has been witnessing a meteoric rise after DMK coming to power”, says opposition parties.
“Both Udhay and Sabari have realised, they have made more money in one year than they [unclear] entire lives and now it’s getting to be a problem, how to handle it, how to not get caught, how to get payments here. [unclear] Its all being made gradually? 10 to 20 crores. assuming we will say 5000 crores. [unclear]. How can you [unclear] 5000 crores without paying any [unclear]”, the audio clip supposedly of PTR says.
According to political commentator ‘Savukku’ Shankar, Palanivel Thiagarajan made these comments to a Delhi journalist. The audio clip has surfaced amidst Tamil Nadu BJP accusing DMK leaders of gaining disproportionate assets over the years.
PTR Palanivel Thiagarajan has neither denied nor owned the speech in the audio; he merely said that it would be time-consuming and a waste of effort to pursue finding out the integrity of the same and the people behind it.
Anyway, his audio lent credence to Annamalai’s charges in the DMK files. The DMK’s first family, it is learnt, wants him to be removed from the cabinet at the earliest possible and exert pressure on CM Stalin.
IT sources told the media, “The searches are on. We cannot share anything more at this stage,” The extent of the alleged tax evasion and the period during which it was allegedly conducted have not been shared yet.
G Square was formed in October 2012, G Square Realtors as a private company. It was registered with the Registrar of Companies in Chennai. The Income Tax Department had previously raided the firm in 2019 before the state assembly elections. Sources said the search operation began around 7 am at various offices of the company in Chennai, Coimbatore (in Tamil Nadu), and Bengaluru, as well as the residence of the company’s owner, Ramajayam, also known as Bala.
Shanmugam, a chartered accountant from Chennai’s Anna Nagar and another close associate of the company’s owners, have also become subjects of interest for the IT authorities, it is learnt. He accompanied the CM trip to Dubai last March. Even as details of the ongoing searches were unclear until Monday evening, and the IT Department officers engaged in the search operations sought time to share details, G Square, in its statement, denied the allegations made by Annamalai. The company claimed it is neither owned nor controlled by the DMK’s first family.
Annamalai had accused G Square of being owned by the DMK’s first family and alleged that it had amassed wealth through corruption.
In its statement, G Square said the alleged valuation of the company’s assets is “grossly inaccurate and entirely unfounded”. It maintained that the company’s assets and liabilities are public records, available through the Registrar of Companies, which would disprove the claimed revenue holding of Rs 38,827.70 crore. G Square has a paid-up capital of just one lakh. It stated that all claims and allegations against it were false and baseless.
G Square, in its statement, said “it is fully cooperating with the authorities. It added that it had been subjected to “unwarranted persecution” through “unfounded allegations. Over the past few months, our organisation has been subjected to unwarranted persecution from multiple fronts through unfounded allegations with no evidence to back them up. Even though it has been an incredibly challenging time for us, we are grateful that measures are now being taken to validate the legitimacy of these claims. We want to take this opportunity to state that there is no truth to these allegations emphatically”.
It also said, ‘As an organisation, we believe in transparency and have always been open with our stakeholders. We assure everyone that we have nothing to hide and nothing to fear. We are fully cooperating with the authorities throughout this process and are hopeful that this validation will end the malicious propaganda that has been spread against us.
The company reported a loss of Rs 7 crore in 2020 and Rs 8 crore in 2021. CEO Eshwar claimed that the turnover of G Square rose to 2000 crores in the latter half of 2021, that is, after DMK came to power, and the projection for 2022 is 4000 crores. From 2017 to 2020, as per the RERA filings, G Square had NIL business. G Square’s proprietor Bala @ Ramajeyam, was so poor that he had to get a loan of Rs 17.73 lakhs from Anna Nagar MLA Mohan in 2021. Mohan has also given a loan of Rs 17.49 lakhs to Sreejith, the brother-in-law of Ramajeyam. But, the firm claims it is now doing real estate business in Tamil Nadu, Bengaluru, Hyderabad, Coimbatore, Trichy, Hosur, Mysuru and Ballari.
There have been allegations that G Square had received unhindered support when Stalin was Deputy CM in his father Karunanidhi’s cabinet. Annamalai charged that his allegations of money swindling were not confined to the; present regime but also during the period of M Karunanidhi. Sabareesan allegedly coordinated the DMK family’s Dubai trip last year, which was touted as seeking investment for the State. The opposition, mainly BJP, charged that it was to bring back the money of the DMK family as an ‘investment’, a new method to convert black into white. Annamalai made these charges in the DMK file, which he released on April 14.
Meanwhile, the DMK cadre protested after an IT official carried out raids at the house of Anna Nagar DMK MLA MK Mohan’s son, a shareholder of firm G Square.