"It is totally wrong. It is a planned rumour spread by some people," Tamil Nadu Finance Minister D Jayakumar told reporters.
A section of the media had reported that the IT department had forwarded to the state government a list of the names of some ministers and officials, who had allegedly been beneficiaries of Reddy's largesses.
When asked about the IT department letter and "inaction" over it, Jayakumar, who is both a senior minister and party leader, said, "If you get some Income Tax letter like that, let us know, then I will answer you."
Reddy, his associates Srinivasulu and Prem Kumar, were arrested on March 20 by the Enforcement Directorate for alleged money laundering by them. The three are now in judicial custody till May 11.
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Answering questions on the issue, Law Minister C V Shanmugam too dismissed the reports and sought to turn heat on rebel leader O Panneerselvam.
"Why the links between Sekhar Reddy and Panneerselvam should not be probed?" he asked.
Asked about Panneerselvam's comment recently that a snap assembly election may be held ahead of the civic polls, Shanmugam, a party strongman of Villupuram district, said let Panneerselvam first answer if he was ready to face an inquiry in the Reddy issue.
He asked if Panneerselvam had the guts to say that he was ready to face an inquiry commission over his alleged links to Reddy.
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