The CBI has filed an FIR alleging that V K Sasikala, a close aide to late Tamil Nadu Chief Minister J Jayalalithaa, paid Rs 450 crore in demonetised high-denomination notes to acquire a sugar factory in 2016, based on a complaint from Indian Overseas Bank (IOB) and directives from the Madras High Court.

The case targets Padmaadevi Sugars Limited (PSL, formerly SV Sugar Mills), accused of causing Rs 120 crore losses to IOB through fraudulent credit facilities, with the account declared fraud in 2020. Sasikala is not named as an accused in the FIR.

Income-tax raids in 2017 uncovered documents indicating the Rs 450 crore payment during demonetisation for the Kancheepuram-based factory from the Patel Group. Hitesh Shivgan Patel, managing PSL's finances, confirmed under oath receiving the sum in old notes. An MoU and original share certificates, seized during searches on November 18, 2017, led the I-T department to attach the factory under the Benami Properties Transactions Act, deeming it held for Sasikala's benefit despite the Patel Group's nominal ownership.

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The CBI took over the probe in July and conducted searches at six Tamil Nadu locations on August 12, including Tenkasi, Chennai, and Tiruchirapalli, targeting residences of PSL directors, officers, and linked entities like Appu Hotels Limited and Otium Wood Industries.

Allegations include misappropriation of funds, diversion to sister concerns, syphoning to related parties, interest-free advances, and suspicious cash deposits during demonetisation. The agency suspects fund transfers to shell companies to obscure borrowed amounts' end use.

Jayalalithaa died on December 5, 2016, shortly after demonetisation began. The case highlights potential benami dealings and financial irregularities tied to high-profile figures in Tamil Nadu politics.

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