The Enforcement Directorate ' title=' Enforcement Directorate '>Enforcement Directorate (ED) on Friday said it has provisionally attached properties worth Rs 33.74 crore of businessman J.Shekhar Reddy and his associates under the Prevention of Money Laundering Act (PMLA).

In a statement issued here, it said the provisional attachment is in connection with case of exchangeing old or demonetised for new notes.

The ED said it is conducting investigation under PMLA against Reddy and others based on the cases registered by Central Bureau of Investigation (CBI) against them in relation to the seizure of about Rs 34 crore of new currency notes from them by the Income Tax department.

According to ED, on examination under PMLA, Reddy had stated that cash seized by the Income Tax department belongs to his SRS mining company and admitted that it was unaccounted money.

"He has not divulged the actual source of new currencies other than stating that it is from the sand mining business," ED said.

The ED said Reddy's associate Srinivasulu had stated that he used to receive money from SRS mining and used part of it to be converted into gold bars through Premakumar as per Reddy's instructions.

Remaining cash was kept at various premises and the same was earlier recovered and seized by Income Tax department.

However, Srinivasulu has not divulged the modus operandi of converting old currencies in to new currencies, the ED said.

Investigations revealed that the demonetised currencies are converted to new through various persons on commission basis.

On reasonable belief that the seized new currencies to the tune of Rs 33,74,92,000 are proceeds of crime, the same were provisionally attached under the provisions of PMLA, said the ED, adding that further investigations are in progress.