Malappuram: Busting a currency exchange racket, police have seized Rs 39.98 lakh in Rs 2,000 denomination notes at Tirur area in the district and arrested a man, already facing a hawala case.
While Rs 3 lakh was seized from 63-year-old Shoukath Ali at the bus stand in Tirur, Rs 36.98 lakh in Rs 2,000 notes was recovered from the residence of a businessman, police said, noting the seizure and arrest were made Friday.
Ali, hailing from Palakkad district, was produced before a magistrate's court and remanded in judicial custody Saturday, police said.
A search was on for businessman Shabir Babu, who had allegedly given the Rs 3 lakh to Ali to exchange scrapped Rs 500 and Rs 1,000 notes.
Babu had also allegedly distributed new currency notes to nine other persons in exchange for scrapped notes, they said.
Ali had been arrested six months ago on charges of hawala transactions and is out on bail, police added.
(With agency inputs)