Congress MLA K C Veerendra Puppy was arrested in Gangtok, where he was on a business visit.Karnataka Congress MLA, gaming businessman, and Goa casino owner K C Veerendra Puppy, 48, who was arrested in Sikkim by the Directorate of Enforcement (ED) on August 23, was in possession of a car that was bought with proceeds of money from a gaming app linked to a cheating case, the central agency told a special court in Bengaluru on Thursday while seeking his custody extension.While the Chitradurga MLA’s senior counsel questioned his arrest in the absence of any valid predicate case where he was named, the ED argued that three recent First Information Reports (FIRs) registered in Goa, Hyderabad and Gujarat, involving allegations of fraud filed by gaming app users, were the basis for his arrest.ED counsel, Pramod Chandra I S, argued that in one of the fraud cases, investigations had revealed that funds from the company that operated the online app had been routed to an online betting site operated by Puppy’s businesses. The funds had been used to purchase a car through a benami, and the car has been seized from the MLA, the ED alleged.The central agency also alleged that the fund transfers from an app linked to a fraud case to a betting firm linked to Veerendra involved the offence of money laundering under the Prevention of Money Laundering Act (PMLA).No predicate offence against MLA, defence counsel arguesThe senior counsels who appeared for Puppy in the special court, Kiran Javali and H S Chandramouli, argued that his arrest was unwarranted as he had not been named directly in any existing predicate FIRs and that the previous four offences where he was linked had either been closed, quashed or had led to an acquittal.A Central Bureau of Investigation (CBI) case taken up against Puppy in 2016 on the basis of an income tax raid during demonetisation had also been closed for want of incriminating material, it was argued.The new FIRs to which the ED has linked Puppy “are complaints by users of apps that are registered in different parts of the country, and he is not linked in the cases”, Javali argued.Story continues below this adThe ED, however, argued that the defence was not aware that the probe of the FIRs registered in Goa, Hyderabad and Gujarat had demonstrated links with the MLA’s business entities.ED granted custodyFollowing the arguments, the special court for elected representatives said that the grounds of arrest and remand plea had established a requirement for further custody and granted the agency custody of Puppy until September 3.The court also allowed the MLA’s advocates to present at a distance during his questioning. Earlier, Puppy’s counsel had argued that they were not treated with dignity by ED officials during the first five days of his custody.MLA associate moves HCMeanwhile, an associate of the MLA, Anil Gowda H, whose properties were also searched by the ED on August 22 and 23 in the crackdown on Puppy’s casino and online gaming businesses, has moved the Karnataka High Court to stay a summons issued to him by the ED and to quash the agency’s case.Story continues below this adGowda, who is the brother of Kusuma H, the losing Congress MLA candidate from the R R Nagar Assembly seat in Bengaluru in 2023, has called into question an ED summons dated August 24, urged that the ED probe be declared “illegal and bad in law”, and that the agency be directed not to take coercive action against him.Puppy considered close to DKSK C Veerendra Puppy is considered to be a close associate of Karnataka Deputy Chief Minister D K Shivakumar. On August 22 and 23, the ED carried out searches at 31 locations linked to Puppy, his brothers, and his associates. Puppy was arrested in Gangtok, where he was on a business visit.Puppy is the son-in-law of Kannada film actor Doddanna and was arrested in 2016 by the CBI for attempting to launder money during the demonetisation period. He was arrested after income tax officials seized ₹ 5.7 crore of cash in new ₹ 2,000 notes in a secret chamber in the bathroom of his Chitradurga home.Stay updated with the latest - Click here to follow us on Instagram© The Indian Express Pvt Ltd