Kolkata Police conducted raids on two premises of a non-banking finance company (NBFC), Angela Mercantile Pvt Ltd (AMPL), owned by Praveen Aggrawal who former CBI interim director M Nageswara Rao called a "long-time family friend".
In a statement, Rao denied "linkage of this firm with my family members, as reported by some media outlets today".
Kolkata Police's Joint CP (Crime) Praveen Tripathy confirmed the raids and told The Indian Express: "Reports claiming that police conducted raid (on firm) with links to a senior police officer are incorrect. Kolkata Police has conducted raid on Angela Mercantile Pvt Ltd, a company owned by one Praveen Agarwal, who has not registered his firm as per law."
Police sources said the action was taken based on a case filed at Bowbazar police station.
Officials said the raid was conducted at AMPL's previously registered office at Salt Lake's CA block, Sector 1, and on the premises of another associate company at 5-Clive Row, Dr Rajendra Prasad Sarani.
The location of the raid at Salt Lake is a residential premise, and AMPL, incorporated in February 1994, had a registered office there until October 2018, sources said.
While it is alleged that the company and Rao's wife, M Sandhya, had several financial transactions, Rao said in a statement, "Question of unaccounted money does not arise at all."
According to sources, records under Registrar of Companies (RoC) indicate multiple financial transactions between Sandhya and AMPL. She had borrowed Rs 25 lakh from AMPL in 2010-11, 2011-12, and 2013-14 financial years, the records show.
Sandhya, the records state, gave "loans" of Rs 1.14 crore to AMPL in three tranches - Rs 35.56 lakh in financial year ending 2012, Rs 38.27 lakh in 2013, and Rs 40.29 lakh in 2014.
Defending the financial transactions, Rao said in his statement, "In 2010, my wife Mannem Sandhya took a loan of Rs 25 lakh from Angela Mercantile, owned by Praveen Agarwal, a long-time family friend. This sum was used in joint purchase of a property in Guntur (Andhra Pradesh). In 2011, (she) sold her ancestral agricultural land of 11-17 acres for Rs 58.62 lakh and transferred it to Angela Mercantile…after deducting the loan amount and adding interest, near about Rs 41 lakh 33 thousand was returned to her, which includes accrued interest amount of rupees 6 lakh 33 thousand 165."
According to Rao, "Due intimation were given to the competent authority about borrowing of funds, purchase of property, sale of inherited agricultural property. I deny all reports (of unaccounted transaction), as they are incorrect and untrue."