Even as the CBI raids continued for the third day today on companies owned by the YSR Congress president, YS Jaganmohan reddy and on those companies which invested in his group for gaining favours from the government, the raids and searches conducted in the last two days gave new ammunition for the Enforcement Directorate (ED). 

CBI teams seized evidence to show that the companies floated by Jagan had indulged in money laundering through foreign investments. The CBI has passed on this information to the ED which is set to register cases against Jagan and his companies under the provisions of the Prevention of Money Laundering Act (PMLA).

The seized documents revealed that two Protected Cell Companies (PCC) of Mauritius had invested in Sandur Power owned by Jagan. The PCC companies need not explain their investments to any one under the laws of Mauritius. But, the Securities Exchange Board of India (SEBI) had long ago banned the operations of the PCC companies in India for the reason that they are being used for money laundering. 

The evidence shows that the money invested by the Mauritius companies in Sandur power was diverted to the Jagan-owned two media entities, Jagati Publications and Indira Television, operators of Sakshi newspaper and TV respectively. 

As per the rules of the Foreign Exchange Management Act (FEMA), foreign direct investment in the media sector in India can’t exceed 26 per cent but the investments in Sakshi daily and TV channel crossed 32 per cent and this is being examined by the ED.

According to CBI sources, the ED is likely to file a separate case against Jagan and his media companies under the PMLA in a day or two. Most of the offences under this Act are of non-bailable in nature.