The state government denies they had got received any investigation request from the Income Tax Department. "No such request has come from Income tax Department and we cannot answer hypothetical questions," said Textiles Minister OS Manian.
Sekhar Reddy, 47, who is under trial in several cases of tax evasion and money laundering, is in Chennai's Puzhal jail. He was arrested in March - three months after Rs 142 crore in cash and 127 kg in gold were seized from his properties during the demonetisation drive. Of the cache, Rs 34 crore was in new 2000 rupee notes.
After questioning him, the income tax authorities had raided the state's former Chief Secretary Rama Mohana Rao, triggering speculations about Mr Reddy's links with the state government.
Mr Rao was removed from his post in December following income tax raids at his home and office in Chennai. Mr Reddy allegedly has business links with Mr Rao's son Vikram Rao.
"This 400 crores, I believe, is the tip of the iceberg," said DMK spokesperson A Saravanan. "The real loot could be around thousands of crores worth of money. All ministers of this ADMK government are complicit. They should be brought to book," he added.
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