Coimbatore : Police have unearthed a fake currency producing and circulating racket in the city and search is on for those involved in it, including a DMK functionary.

On a tip off from Intelligence Bureau, police on Saturday night carried out search on the house of E Anandan, Annur Union Secretary and son of former DMK MLA, Elango in Vadavalli and recovered demonetised currency in the denomination of Rs.1,000, police said Monday.

On verification it was found that Rs.1,000 banned note was placed on top and pink colour paper below to make it a bundle of 100 notes and there were 934 such bundles, they said.

Besides the bundles, police seized a cash counting machine, pink powder packet, an air gun and pellets from the residence.

Cases have been registered against Anandan and two of his accomplices Sheikh and Rasheed of the city under various IPC sections including 120 (b) (criminal conspiracy), 420 (cheating) and 489 (b) (using as genuine, forged or counterfeit currency notes or bank notes) and section 7 read with 5 of Specified Bank Notes (cessation of Liabilities) Act 2017.

A special police team has been formed to nab the accused, amidst reports that they were involved in producing and circulating fake currency on previous occasion and also in land grabbing cases, they said.