The Enforcement Directorate (ED) has begun a preliminary enquiry against former Bidhannagar Mayor and ex-Trinamool Congress MLA Sabyasachi Dutta in connection with an alleged extortion case, a senior official of the federal probe agency said on Monday.

The ED started collecting documents related to the FIR registered against Dutta by the West Bengal Police, but is yet to register an Enforcement Case Information Report (ECIR), the equivalent of an FIR in money laundering investigations, he said.

A senior ED official told PTI that the federal probe agency was currently examining the police records and other materials before taking a call on initiating a formal money laundering investigation.

"As of now, we have begun a preliminary verification of the predicate offence. We are collecting the FIR, seizure lists and other relevant documents from the state police. An ECIR has not yet been registered. A decision on that will be taken after examining whether the available material discloses proceeds of crime under the Prevention of Money Laundering Act," the officer said.

The development comes days after Dutta was arrested by the Bidhannagar North Police in an alleged extortion case. Investigators are probing allegations that he extorted a substantial amount of money from a businessman.

According to sources, the central probe agency is also scrutinising Dutta's financial transactions following reports that police had frozen five bank accounts linked to him.

The development comes days after Dutta was arrested by the Bidhannagar North Police in an alleged extortion case.

Investigators are probing allegations that he extorted a substantial amount of money from a businessman, a policeman from Bidhannagar Police Commissionerate said.

Police are examining deposits and withdrawals in the accounts, which allegedly contain around Rs 3.70 crore. Some of the accounts are in Dutta's name, while others are jointly held, the officer said.

Police had also recovered a substantial quantity of gold from Dutta's New Town residence during searches conducted after his arrest.

The ED is expected to verify whether the seized assets and financial transactions have any link to the alleged proceeds of crime arising out of the extortion case, the ED official said.

"The ED is looking at the financial trail. The objective at this stage is to determine whether the alleged offence has generated proceeds of crime that attract the provisions of the PMLA. The enquiry is at a preliminary stage," he said.

The ED is also taking note of the recovery of over 3.300 kg of gold from the residence of Tina Bhowmik Saha, a close associate of Dutta, in Tehatta in Nadia district during the course of the police investigation, he added.

The recovery of gold, cash and financial records from multiple locations is among the factors being examined by the central agency while assessing whether a money laundering case needs to be registered, the official said.

According to him, the ED may formally register an ECIR after obtaining the necessary approval from its headquarters in New Delhi if the preliminary enquiry establishes the existence of proceeds of crime under the Prevention of Money Laundering Act (PMLA), 2002.