Congress leader in Karnataka DK Shivakumar was remanded to ED custody till September 13 by a Delhi court after he was arrested on September 3. Shivakumar was arrested under the Prevention of Money Laundering Act (PMLA) in a money laundering as he was not cooperating with Enforcement Directorate in the case.
The alleged money laundering by DK Shivakumar came to light after raids by the Income Tax officials on August 2, 2017, at four flats in New Delhi, which led to the seizure of unaccounted cash worth Rs.8.59 crore without evidence of its source of income. These flats were linked to Shivakumar, and associates Sachin Narayan and Sunil Kumar Sharma.
Another two associates, Anjaneya Hanumanthaiah and N Rajendran, employees of Karnataka Bhavan in New Delhi, had allegedly stored the case in the flats on behalf of the Congress leaders. They had said that they were handling the money of Shivakumar, but later they had retracted their statements.
Hanumanthaiah had told the Income Tax department that was responsible for the handling of unaccounted money belonging to Shivakumar, and was also the custodian of keys to the flats where the money was kept. The complaint filed by I-T dept says that the flats were purchased by the Congress leader to entertain guests, and to store unaccounted cash. The cash was generated in Bangalore and other places, which was then transported by Sunil Sharma to Delhi to be stored in the flats. This cash was then distributed by Shivakumar, and this entire operation was conducted to evade tax, I-T dept says.
The I-T Dept had also revealed that Shivakumar and his associates had used hawala channels to transport unaccounted money on a regular basis. “Accused number 1 (Shivakumar) has set up an extensive network of persons and premises across Delhi and Bangalore in order to transport and utilise unaccounted cash”, the department had said in its complaint submitted at the Special Court for Economic Offences in Delhi.
Sunil Kumar Sharma owns a transportation business named Sharma Transport, and it is alleged Sharma’s transport business facilitated the movement of cash from Bengaluru and other places in the country to Delhi, and subsequent distribution of cash to individuals on the directions of Shivakumar.
Shivakumar didn’t have any document to account for the cash recovered, and documents seized during the search showed that payments were made to AICC official V Mulgund from the stored cash. He had said he has agricultural income, but had no document to prove that.
The raids in Delhi by the Income Tax department were the result of another I-T raid conducted in March 2016, on K. Govindaraj, Parliamentary Secretary to the then Chief Minister of Karnataka, Siddaramaiah and a member of the Legislative Council of the state. The raids had led to the seizure of a diary that allegedly listed financial transactions between different entities, which were referred to only through their initials.
The diary had entries like ‘RG Office’, ‘SG Office’, ‘Media, ‘DKS’, ‘M. Vora’ and ‘AICC’ etc, which were either paid amounts or from whom payments were received. One of the pages on the diary showed ₹3 crore received from one ‘DKS’. Another payment of ₹2 crore was sent by him to AICC, according to I-T dept.
Eventually, the Income Tax department raid on DK Shivakumar had led to a money laundering case registered against him by the Enforcement Directorate in September last year. Before his arrest, ED had summoned him for questioning, but as he was not cooperating with the prove, the ED took him into custody.