Lodha, Tandon, Reddy: Unravelling black money trail in Kolkata, Delhi, TN

ED arrested Lodha in connection with alleged conversion of over Rs 25 cr old currency in new notes

The curious case of Kolkata-based realtor Paras Mal Lodha, his association with Delhi lawyer Rohit Tandon and Chennai-based sand mining baron Shekhar Reddy, is a tale worthy of a best-selling crime thriller, not only because of the amount of money involved, but also because it has caused ripples in both Delhi and Tamil Nadu.

The Enforcement Directorate (ED) on Thursday arrested Paras Lodha in connection with alleged conversion of over Rs 25 crore old currency in new notes. He has been sent to seven days custody by a city court. The ED requires him to unearth the money trail. 

Income Tax sleuths had earlier detained Lodha at Mumbai airport in connection with cash confiscated from the office of lawyer Rohit Tandon in Delhi.Officials said he came under the department’s scanner for hosting a high profile wedding for his daughter, which was reportedly attended by top bureaucrats, politicians and members of the film industry. The ED’s move came when it got a tip-off about Lodha planning to leave India, as it had earlier issued a look out circular against him. Officials said that separate teams were sent to Kolkata and Mumbai to arrest Lodha who facilitated businessman Shekhar Reddy and owner of T&T law firm Rohit Tandon convert their old high value currency into new currency.

DNA reported that Lodha’s name popped up on the ED’s radar after raids were carried out on the office of Delhi-based lawyer Rohit Tandon, who is the managing partner of T&T law firm, where Rs 13.62 crore, including Rs. 2.62 crore of new denomination notes of Rs. 2000, was recovered on December 10 and seized. Pursuant to this, an FIR was registered by the Crime Branch, Delhi. Tandon too owns properties in London and UAE and has invested heavily in real estate in Delhi, including a Rs 100-crore bungalow in Jor Bagh.

In connection with the case, IT officials raided at 12 locations on Wednesday, including the house of Tamil Nadu Chief Secretary P Rama Mohana Rao. The raids began on Wednesday morning and continued till Thursday and saw recovery of a large amount of cash in new currency.

ED officials earlier on December 1 raided multiple hawala operators across the country involved in illegal conversion of old currency notes of Rs 500 and Rs 1,000 to valid legal tender since November 8 demonetisation announcement. 

ED sources told The Indian Express that the “digital diary” of Lodha reveals he was offering his services to the “entire spectrum of political personalities”. His WhatsApp chats, show he was offering conversion of notes at the rate of 20-25 per cent. On Wednesday, CBI arrested Sekhar Reddy, a former Tirumala Tirupathi Devasthanam Board Member, and two others from Chennai for money laundering after Income Tax department seized 177 kg of gold, Rs 96 crore in old 500 and 1,000 rupee notes and Rs 34 crore in new currency from their premises. Tandon too owns properties in London and UAE and has invested heavily in real estate in Delhi, including a Rs 100-crore bungalow in Jor Bagh.

The Times of India reports that the ED had started questioning Lodha three days ago when it found that he had helped Tandon and Reddy convert crores of outlawed notes into new ones. Reportedly, Lodha admitted to having converted Rs 25 crore and Rs 18 crore belonging to them, after charging them a premium of 15-20 per cent.

A Saket court, in which Lodha was produced, witnessed high voltage drama, wherein he first refused to engage his counsel in the proceedings. After a while, his counsel arrived and pleaded with the court to have in-camera proceeding.

 Lodha has been booked under sections 420 (cheating), 409 (criminal breach of trust by public servant, or by banker, merchant or agent) and 120B (criminal conspiracy) of the IPC. The ED, in its plea seeking 14 days remand of Lodha, said his custodial interrogation was necessary to identify the names and details of international and Hawala operators involved in the matter and others who have committed the offence of money laundering under Prevention of Money Laundering Act (PMLA).

 The ED further alleged that the new currency notes which were entrusted to banks and government officials and were supposed to be delivered to public/ bank account holders, appear to have been misappropriated by Lodha and others for their monetary gains, thereby "cheating public at large" and causing monetary loss to the central government.

 Lodha had emerged as an important figure in Kolkata's realty sector in the 1990s. He made headlines in 1991 for taking over the then largest non-banking financial institution, Peerless General Finance and Investment Company Limited, alleging that it was being mismanaged and that he had plans to revamp it. Lodha is also alleged to have links with fugitive gangster Dawood Ibrahim.  Dawood had asked Lodha to threaten Peerless Chairman and Managing Director P C Sen to sell his majority stake in the firm to Lodha, the Indian Express report said.

Apart from realty, Lodha expanded his business to mining, consultancy firms and dealing in antiques. According to a report in Times of India,  Lodha has gained nicknames such as 'Extra floors Lodha' or 'Fiddler on the roof' for adding extra floors to an existing property. Lodha is currently the director of seven firms and is registered with the Ministry of Corporate Affairs.

Lodha’s  name also allegedly cropped up in the Kolkata’s Stephen Court fire case in 2010, where 43 people died.