The Kolkata Police on Friday searched two properties of a firm linked to Nageswara Rao, the former interim director of the Central Bureau of Investigation, News18 reported. The police claimed that they were merely conducting an “examination” of Rao’s properties.

The searches came just a day before the CBI interrogates Kolkata Commissioner of Police Rajeev Kumar in connection with the Saradha chit fund scam. Rao, speaking to ANI, dismissed Friday’s police action. “All that is happening, appears to be propaganda,” he told the agency.

The police have surrounded two offices of Angelina Mercentile Private Limited, a firm that made several financial transactions with Rao’s wife Mannem Sandhya, and their daughter. The searches were conducted at its Kolkata office as well as the one in Salt Lake City.

In October, The Indian Express had reported that records maintained by the Registrar of Companies showed several financial transactions between Sandhya and Angelina Mercantile Pvt Ltd between 2011 and 2014. The report said that Sandhya had borrowed Rs 25 lakh from the company in the financial year ending March 2011. Between 2012 and 2014, she gave loans worth Rs 1.14 crore to the company in three tranches.

Rao had issued a statement defending these transactions. He said Sandhya sold inherited agricultural land and repaid the loans she had taken from Angelina Mercantile Pvt Ltd. The company retained the balance of Rs 35 lakh as investment, he added. The former CBI officer also asserted that he has annually submitted complete details of all properties owned by him and his wife to the government.

The police action comes in the background of a spat between the West Bengal government and the CBI over the interrogation of Rajeev Kumar in connection with the Saradha and Rose Valley chit fund scams. The stand-off began after a CBI team reached Kumar’s home to question him on Sunday evening. Police officials stopped them and detained five members of the team for around two hours. Banerjee came out in Kumar’s support and called the CBI action a “coup” by the Centre. She then started a dharna.

The Supreme Court on Tuesday directed Kumar to cooperate with the CBI in its inquiry in the Rose Valley and Saradha chit fund scams. The court said no coercive steps, including arrest, can be taken against the police officer but issued contempt notice to Kumar, Director General of Police Virendra and the West Bengal government, and asked them to file replies by February 18. After the court’s order, Banerjee ended her three-day dharna and claimed that it was a moral victory for the state police.

The Central Bureau of Investigation on Thursday summoned Rajeev Kumar for questioning on February 9 in connection with the Saradha chit fund scam. He will be interrogated in Shillong.