Chennai, May 8 (Deccan Chronicle): Tamil Nadu sand mining baron J Sekhar Reddy paid state ministers and bureaucrats around 400 crores, the Income Tax department is said to have told the state government.

The decision is now up to the state government to order a probe, an NDTV report said.

J Sekhar Reddy was earlier accused of money laundering by the Enforcement Directorate and was sent to judicial custody till March 28.

The Income Tax department had recovered a huge amount of cash in December, from properties belonging to Reddy. It included Rs. 142 crore cash, which also had the new 2,000-rupee notes adding up to Rs. 34 crore. He was arrested for tax evasion by the CBI, a few days later and was given bail after spending 87 days in jail. However, he was rearrested just three days later.

Reddy allegedly has business links with the son of former Tamil Nadiu chief secretary P Rama Mohana Rao's son, Vikram Rao who was removed from his post in December after the Income Tax department raided his home and office in Chennai.

On Friday, following the Prevention of Money Laundering Act, the ED provisionally attached properties worth Rs. 33.74 crore of Reddy and his associates.

On examination under PMLA, the ED said that Reddy had stated that cash seized by the Income Tax department belongs to his SRS mining company. He also admitted it to be money that was unaccounted for.

The huge amount paid to those in Reddy's payroll might be the share of the money that he gained during the sand mining scam and PWD contracts with political patronage, sources in the Income Tax department were quoted as saying by NDTV.

The I-T department has already recovered incriminating documents after Vijayabasker, health minister of Tamil Nadu was raided. The money was used to buy votes from people in the RK Nagar constituency, following which the by-polls were cancelled by the Election Commission. TTV Dinakaran, sidelined deputy general secretary of AIADMK was the candidate for the bypoll then. This came as a huge embarrassment to the E Palanisamy government in Tamil Nadu.

Photographs of Reddy at the Tirumala Temple in company of former Chief Minister O Paneerselvam had emerged during his arrest, following which the O Panneerselvam faction had clarified that Reddy had received him at the temple since he was a board member.