Penna Cements invested Rs 23 crore in Carmel Asia Holdings owned by Y.S. Jagan Mohan Reddy, and the assumption is that the favour to Penna was in lieu of its investment in Carmel.
The CBI team headed by superintendent of police H. Venkatesh, after verifying the signatures on the eight files, repeatedly asked home minister P. Sabita Indra Reddy whether she was under pressure from the then chief minister or from his office to issue the transfer order. She replied there was no pressure. Ms Sabita Reddy was very close to YSR who used to refer to her as 'Chellamma'.
She told the CBI that as a routine procedure she had signed the note files put up by officials, including mines department secretary Y. Srilakshmi and director, mines and geology, V. D. Rajagopal.
She was asked why three GOs pertaining to the same company (Penna) were issued on the same day. She replied that all the files are circulated at the same time. She said she had no special interest in the case.