Mumbai, Jan 30: In the investigation into the alleged Rs 400-crore demonetised cash heist, the Special Investigation Team (SIT) has found that Virat Gandhi, an arrested hawala operator linked to the Ahmedabad-based Balaji Ashram, attempted to mislead investigators by claiming that the heist never took place, officials said.
During questioning, Gandhi allegedly told the SIT that the case was “fictitious” and that no cash was involved. He claimed that the entire episode was merely a plan to cheat Thane-based builder Kishor Sawla of Rs 35 crore.
Recorded calls contradict accused’s version
However, his claims came under scrutiny when the SIT chief confronted him with recorded conversations allegedly involving Sawla, in which demands ranging between Rs 150 crore and Rs 200 crore were discussed. According to officials, the conversations also indicate the alleged role of a Gujarat-based minister, who is suspected to have acted as a mediator between Gandhi and Sawla in the alleged Rs 400-crore currency conversion deal.
When questioned about these conversations and the alleged role of the Gujarat-based minister, Gandhi reportedly denied any knowledge of the negotiations and told investigators to “ask Sawla”, officials said.
Sawla is currently absconding, and efforts are underway to trace him, the SIT said.
Alleged movement of demonetised cash
Gandhi, identified as an Ahmedabad-based hawala operator, is alleged to have links with an ashram and is suspected to have handled political funds managed by the absconding Thane-based builder. According to the complaint, the funds were allegedly routed for conversion into legal tender and were reportedly intended for use by a Thane-based politician close to Sawla.
Investigators allege that the demonetised currency was being transported in two truck containers from an unidentified location in Karnataka to an ashram in Ahmedabad when it was looted. The alleged heist occurred on October 16 last year at Chorla Ghat on the Maharashtra–Karnataka border, a notorious smuggling hotspot straddling Belagavi district in Karnataka, North Goa, and Sindhudurg in Maharashtra.
RBI data raises wider concerns
According to a Reserve Bank of India (RBI) press release dated January 1, 2026, Rs 2,000 banknotes worth Rs 5,669 crore were still in circulation as of December 31, 2025. The RBI had earlier stated that Rs 2,000 notes worth Rs 3.56 lakh crore were in circulation as of May 19, 2023, when their withdrawal was announced, with around 98.41% of the currency since returned to the banking system. If the alleged Rs 400-crore demonetised cash involved in this heist is confirmed, it would constitute a significant portion of the Rs 2,000 notes still remaining in circulation, raising serious concerns over the ongoing currency withdrawal process.
Cheating angle under probe
During further questioning, Gandhi allegedly told investigators that he and his co-accused Machindra Madhvi, who was recently arrested from Dombivli in Thane district, had planned to cheat Sawla. Gandhi claimed that they gained Sawla’s confidence by projecting themselves as facilitators of political funding conversions and by stating that they were already involved in converting Rs 400 crore in political funds through an Ahmedabad-based ashram.
According to Gandhi, Sawla was told that if he invested a security deposit for the Rs 400-crore transaction, he would earn nearly double the amount. Gandhi allegedly claimed that several other investors were also part of the scheme and were promised quick returns.
Sources said Gandhi told investigators that Sawla was assured that an investment of Rs 35 crore would fetch him Rs 68 crore, while the remaining Rs 32 crore would be distributed among other investors participating in the security deposit arrangement.
Gandhi further claimed that Sawla handed over Rs 35 crore as a security deposit. Later, Gandhi allegedly informed him that the consignment was looted during transit at Chorla Ghat, Karnataka, and that Sawla’s money, along with the demonetised cash, never reached the ashram, thereby cheating the builder.
Conflicting narratives
SIT sources said that the alleged deal is not only internally contradictory but also lacks any logical or financial basis.
SIT chief Aditya Mirkhelkar said the agency is close to arresting Sawla, after which the investigation is expected to reach a decisive stage to determine whether the alleged heist actually occurred or whether the case pertains to cheating and misrepresentation.
Officials acknowledged that the probe has taken multiple turns, with each arrested accused presenting a different narrative. Call data records, digital evidence and documents collected so far have not conclusively corroborated any single version, they said.
Inter-state probe intensifies
Meanwhile, another individual, Sayyad Azhar Ali, has surfaced during the investigation. According to sources, Azhar, a Chennai-based individual, allegedly booked the containers used for transporting the cash and is believed to have moved to Dubai in December.
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The alleged Rs 400-crore cash consignment has now turned into a ghost in the Ghats. Apart from Maharashtra Police, teams from Karnataka and Goa have also been roped in. Police units from all three states are coordinating to verify the alleged movement and disappearance of the consignment, particularly in and around the Chorla Ghat region, which lies at the tri-junction of Maharashtra, Karnataka and Goa. Investigators said the inter-state coordination is aimed at cross-checking inputs, gathering local intelligence and determining whether the alleged incident occurred during transit through the region.
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