Mallya - Notice to RBI Governor

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Information about Mallya - Notice to RBI Governor

Published on March 14, 2016

Author: NagarajaMysuruRaghup

Source: slideshare.net

1. S.O.S e - Voice For Justice - e-news weekly Spreading the light of humanity & freedom Editor: Nagaraja.M.R.. Vol.12..Issue.11........19/03/2016 SHOW-CAUSE NOTICE TO GOVERNOR RESERVE BANK OF INDIA ( RBI ) , UNION FINANCE MINISTER , GOI and CHIEF JUSTICE OF INDIA , SCI I don’t know whether secretariat staff of RBI office & DARPG / DPG officials are forwarding my appeals for justice , e-mails to you or not. They will be held accountable for their lapses if any. This notice is against the repeated failure of constitutional duties & indirect collusion with criminals (mya be out of fear or favor or both ) by previous RBI Governors , CJIs , Union Finace Ministers. Notice is served against them , to the office of RBI GOVERNOR , office of CJI & office of Union Finace Minister , NOT personally against you. At the individual level I do whole heartedly respect your honourableselves. Below mentioned huge financial frauds , scams , swindling , cheating like MALLYA fraud , Satyam Fraud , NPA fraud cann’t go unnoticed by your offices. They cann’t happen without covert or overt , direct or indirect support from your offices. When these frauds were brought to your notice & information sought under RTI Act , your offices failed to answer properly. Lest the truth come out. Thereby , they are shielding the criminals. When the issue was brought to the notice of SCI & CJI and appealed to them for justice , safety of public money they too failed to do their duties. Thereby , CJI too supported criminals by shielding them. In india democracy is a farce , freedom a mirage. the most basic freedom RIGHT TO INFORMATION & EXPRESSION , is not honoured by the government,as the information opens up the crimes of V.V.I.Ps & leads to their ill-gotten wealth. The public servants are least bothered about the lives of people or justice to them. these type of fat cats , parasites are a drain on the public exchequer . these people want ,wish me to see dead , wish to see HUMAN RIGHTS WATCH closed . so that, a voice against injustices is silenced forever , the crimes of V.V.I.Ps closed , buried forever. To my numerous appeals , HRW’s appeals to you ,you have not yet replied. It clearly shows that you are least bothered about the lives of people or justice to them .it proves that you are hell bent to protect the criminals at any cost. you are just pressurising the police to enquire me ,to take my statement, to repeatedly call me to police station all with a view to silence me.all of you enjoy “legal immunity privileges” ,why don’t you have given powers to the police / investigating officer to summon all of you for enquiry ?or else why don’t all of you are not appearing before the police voluntarily for enquiry ?at the least why don’t all of you are not sending your statement about the case to the police either through legal counsel or through post? you are aiding criminals ,by denying me job oppurtunities in R.B.I CURRENCY NOTE PRESS mysore , city civil court ,bangalore , distict court , mysore ,etc & by illegally closing my newspaper. there is a gross, total mismatch between your actions and your oath of office. this amounts to public cheating & moral turpitude on your part. 1.you are making contempt of the very august office you hold. 2.you are making contempt of the constitution of india. 3.you are making contempt of citizens of india.

2. 4.you are sponsoring & aiding terorrism & organized crime by allowing the swindled money to fund terrorist outfits , mafia and underworld. 5.you are violating the fundamental & human rights of the citizens of india and of neighbouring countries. 6.you are violating & making contempt of the U.N HUMAN RIGHTS CHARTER to which india is a signatory. 7.you are obstructing me from performing my fundamental duties as a citizen of india. 8. As a result of your gross negligence of constitutional duties you have caused enormous financial loss to the public exchequer , caused damages to our national security , economic security. 9. You have cheated the public by saying some thing on oath and doing different thing. 10. You are shielding criminals who are funding criminal activities. Hereby , we call upon you to show cause within 30 days of this notice why cann’t you be legally prosecuted for above mentioned charges. Date : 12.03.2016……………………………………………..your’s sincerely, Place : Mysuru , India………………………………………….Nagaraja M R PIL – BANK ROBBERIES by bank executives IN THE SUPREME COURT OF INDIA ORIGINAL JURISDICTION CRIMINAL WRIT PETITION NO. OF 2015 IN THE MATTER OF NAGARAJA . M.R editor SOS e Clarion of Dalit & SOS e Voice for Justice # LIG 2 , No 761 ,, HUDCO First Stage , Laxmikantanagar , Hebbal , Mysore – 570017 , Karnataka State . ....Petitioner Versus Honourable Governor , Reserve Bank of India (RBI) & Others ....Respondents PETITION UNDER ARTICLE 12 to ARTICLE 35 & ARTICLE 51A OF THE CONSTITUTION OF INDIA FOR ISSUANCE OF A WRIT IN THE NATURE OF MANDAMUS UNDER ARTICLE 32 & ARTICLE 226 OF THE CONSTITUTION OF INDIA. To , Hon'ble The Chief Justice of India and His Lordship's Companion Justices of the Supreme Court of India. The Humble petition of the Petitioner above named. MOST RESPECTFULLY SHOWETH : 1. Facts of the case: "Power will go to the hands of rascals, , rogues and freebooters. All Indian leaders will be of low calibre and men of straw. They will have sweet tongues and silly hearts. They will fight among themselves for power and will be lost in political squabbles . A day would come when even air & water will be taxed." Sir Winston made this statement in the House of Commons just before the independence of India & Pakistan. Sadly , the forewarning of Late Winston Churchill has been proved right by some of our criminal , corrupt public servants. 2. Eventhough , I have repeatedly appealed to RBI authorities since years seeking justice regarding illegalities , irregularities in recruitment , currency handling , currency theft , etc @ RBI , they didn’t provide justice at all. 3. For a common man it is a herculean task to get Rs.5000 loan from a bank , but rich & connected get lakhs , crores of rupees loan quite easily from banks , how ? 4. When a common man , farmer defaults to pay loan of few thousands of rupees bank immediately dispatches loan recovery agents / Rowdies , seizes his property & auctions and recover their dues to last penny. Farmers are committing suicide unable to pay loans to escape from ignominy . 5. Huge companies get crores of rupees loan from banks eventhough basically the project report itself is at fault , not viable. Siphons off company resources by insider trading to their sister concerns although bank representatives are very much their on the board of companies. 6 . Such companies default on loan dues to bank , but no recovery agents / rowdies are sent by banks. Finally the company becomes bust. 7. Bank looses money , the company is declared as NON PERFORMING ASSET and government + bank waives off interest or else loan itself. 8. End looser the public whose money went down the drain , profiteers – company promoters , executives and bank manager. No recovery from their personal , family properties why ? 9. Eventhough , I have repeatedly appealed to RBI authorities , Union Finance Ministry since years seeking information under RTI Act regarding illegalities , irregularities in RBI , Various banks , RBI Note Press ( BRBNMPL ) , etc , the RBI authorities have evaded answering our questions lest the TRUTH come out. Supreme court of India specifically Chief Justice of India were also approached to order RBI , Union Finance Ministry to disclose information to us in public interest. But SCI , CJI also failed to do their duties. 10. The money involved here is public money , it is nobody’s papa’s money.

3. 11. These swindled monies are finding it’s way to under world , Mafia & Terror outfits. This proves RBI Governor , Union Finance Minister and Chief Justice of India are least bothered to safe guard PUBLIC MONEY. They are least bothered about our national security. 12. We have offered our conditional services to RBI , Union Finance Ministry & SCI to apprehend corporate criminals , to recover money while the concerned officials have failed to do their duties. Till date RBI , SCI , Government have failed to respond to our offer. 13. We SOS e Clarion of Dalit & SOS e Voice for Justice once again offer our conditional services to authorities , RBI , SCI to legally apprehend corporate criminals , tax evaders & corrupt bank executives and to recover monies from them. Are RBI , SCI & Union Finance Ministry Ready to catch tax thieves , corporate criminals , corporate terrorists ? Are they ready to utilize our services ? 14. By , shielding corporate criminals RBI , SCI , Union finance ministry are shielding corporate criminals to continue financial aid to terrorist outfits , underworld & mafia. Thereby , RBI Governor , Union Finance Minister & CJI , Supreme Court of India have also become parties to those crimes , they themselves have become criminals. 15. These Huge financial frauds , swindling for years cann’t happen repeatedly for years without tacit understanding , cooperation , collusion , connivance of RBI GOVERNOR and UNION FINANCE MINISTER. These crimes are spared from fair , timely legal trials with tacit support of Chief Justice of India. 16. These swindled money is destabilizing our economy , funding terrorist outfits , mafia & underworld. These are posing constant threat to our national security , integrity. 17. By financially supporting funding of criminals , terrorists RBI GOVERNOR , UNION FINANCE MINSTER & CHIEF JUSTICE OF INDIA themselves have become anti nationals , criminals , terrorists. 2. Question(s) of Law: Is it right for banks , government to let out fraudsters , bank executives without criminal prosecution & recovery ? 3. Grounds: Requests for equitable justice , Prosecution of master minds of financial frauds. 4. Averment: Covering up Financial Frauds. Please read details at : https://sites.google.com/site/sosevoiceforjustice/rbi---robberer-s-bureau-of-india , https://evoiceofhumanrightswatch.wordpress.com/2015/07/19/rbi-robberers-bureau-of-india/ , Hereby , I do request the honorable supreme court of India to consider this as a PIL for : “writ of Mandamus” and to issue instructions to the concerned public servants in the following cases to perform their duties & to answer the questions. The Petitioner has sent many letters / appeals / petitions to supreme court of india & other courts through e-mail , DARPG website & through regular mail requesting them to consider those as PILs. But none ofthem were admitted , even acknowledgement for receipts were not given. See How duty conscious ,our judges are & see how our judges are sensitive towards life , liberty of citizens , commonmen & see howcareless our judges are towards anti national crimes , crimes worth crores of rupees. That the present petitioner has not filed any other petition (which are admitted by courts) in any High Court or the Supreme Court of India on the subject matter of the present petition. PRAYER: In the above premises, it is prayed that this Hon'ble Court may be pleased: a . Hereby , I do request the honorable supreme court of India to consider this as a PIL for : “writ of Mandamus” and to issue instructions to the concerned public servants , RBI authorities in the following cases to perform their duties & to answer the below RTI questions. b . to pass such other orders and further orders as may be deemed necessary on the facts and in the circumstances of the case. c. To legally prosecute authorities of M/s RBI & M/s BRBNMPL , who denied job opportunities to me under the behest of criminals responsible for late PM Rajiv Gandhi assassination case. d. To legally prosecute responsible bank executives & fraudsters. e. To make it mandatory for all bank executives including board members to make their income , wealth details public every year. This must be disclosed under RTI A ct. f. To form a statutory mechanism to share information about creditors , debtors , borrowers , policy holders , insurers , wealth managers , etc between all financial institutions like SEBI , RBI , IRDA , Banks , etc. Creditor , debtor information must be disclosed under RTI Act. g. To book criminal cases of Rowdyism , goondaism against rowdy loan recovery agents & respective bank managers. h. To reopen cases of Currency exchange scandal @ RBI Bangalore incinerator and currency theft cases @ RBI currency note press , Mysuru. To also legally prosecute bank executives & CBI investigating officials who shielded original criminals in these cases. i. To order full payment of unjustly withheld salary , gratuity , pension dues , etc to victimized RBI staff Mr. Ganapathi Hariram immediately. j. To appoint a person from lending bank to loan availing companies to monitor it’s daily financial affairs. k. To legally prosecute RBI Governor , Chief Justice of India & Union Finance Minister for aiding fund raisers of terrorists , underworld. l. To order Government of India to accept our conditional offer of apprehending corporate terrorists. m. To criminal legal prosecution against promoters of fraud companies , partners in their crimes supporting company executives and bank executives. n. To order for recovery of money with interest & penalty , by confiscation of properties of such company promoters , their family properties , property of concerned bank executives and most importantly PROPERTIES OF RBI GOVERNOR , UNION FINANCE MINISTER & CJI must be attached. FOR WHICH ACT OF KINDNESS, THE PETITIONER SHALL BE DUTY BOUND, EVER PRAY.

4. Kindly read full details at following web page : https://sites.google.com/site/sosevoiceforjustice/rbi---robberer-s-bureau-of-india , https://evoiceofhumanrightswatch.wordpress.com/2015/07/19/rbi-robberers-bureau-of-india/ , Dated : 12th March 2016 ………………….FILED BY: NAGARAJA.M.R. Place : Mysuru , India……………………. PETITIONER-IN-PERSON Of Rs 7,000 crore lent to Kingfisher, banks can now recover just Rs 6 crore As Vijay Mallya and his son Siddharth sit with a Rs 21 crore purse and seven cricketers he can sell to make some money in the IPL auction, India's public sector banks are struggling to recover even a fraction of their Rs 7000-crore loans from Mallya's grounded Kingfisher Airlines. Documents, forensic reports and accounts of people from across the world studied by dna reveal that members of the 17-bank consortium of lenders led by SBI may never be able to recover the money loaned to Mallya's airline. SBI-Kingfisher tale The State Bank of India (SBI), the major lender to Mallya's airline, till now has managed to recover only Rs 155 crore out of the Rs 1,623 crore due from it. dna has learnt from official SBI sources that the value of Kingfisher Airlines pledged to the bank has now plummeted from Rs 4,000 crore to Rs 6 crore! SBI is unable to find a single buyer for the 'Kingfisher' trademarks. And Kingfisher Airlines has told Indian courts that it is not in a position to payback its debts. According to the hypothecation deed signed between SBI and Kingfisher Airlines on August 10, 2010, SBI was given ownership of all trademarks and goodwill if Kingfisher Airlines failed to repay its debts. These included Fly Kingfisher (label mark & word), Flying Models, Fly The Good Times, Funliner & Kingfisher (label mark). In 2009, global consultancy firm Grant & Thronton valued Kingfisher trademarks at Rs 4,111 crore or roughly $1 billion. In 2012, when the airline's licence was suspended by India's aviation regulator Director General of Civil Aviation (DGCA), Kingfisher Airlines valued itself at Rs 3,008 crore. The current value of the trademarks now stands at a mere Rs 6 crore! "We have put it up for sale. But have not received any satisfactory responses till now," according to official bank sources. Year Brand value of Kingfisher Airlines Money owed to banks (estimated) 2009: Rs 4,111 crore : Rs 4,000 crore 2012: Rs 3,008 crore : Rs 7,000 crore 2014: Rs 6 crore : Rs 7,000 crore The role of some banks is also quite suspicious. One of the banks under the radar of the CBI for its loans to Kingfisher Airlines is IDBI. CBI sources reveal that IDBI had extended loans to Kingfisher despite being warned by some board members not to do so. The result is that the bank has ended up with bad debts of Rs 700 crore. Curiously, IDBI gave the loan to Kingfisher after being pledged the airline's now 'junk' trademarks worth a mere Rs 6 crore! Among the medium-sized banks, Bank of India is owed Rs 308 crore. The bank was mortgaged all the current assets of the airline. It included items like air conditioners, tractors and monetarily unsubstantial items like folding chairs. The bank has been struggling to recover even a fraction of its loan from the sale of Kingfisher's bag of random goodies. How could a bank give over Rs 300 crore after being pledged office stationary like boarding pass printers & folding chairs remains a mystery. BOI did not respond to dna's questions. Sumanto Bhattacharya, spokesperson of UB Group, denies manipulating the banks, "There is no question of any deliberate undervaluation by Kingfisher Airlines Ltd as the banks themselves had conducted their own due diligence including the security available and also satisfied themselves about the viability of Kingfisher Airlines Ltd before undertaking the debt restructuring." Property given as bank guarantee Documents accessed by dna show that Mallya had also given a personal guarantee of several other physical properties – one of which was his 'Hollywood' style Kingfisher Villa located at Candolim, Goa. SBI is awaiting a reply from the District Magistrate who has to give permission for police personnel to step in and help the bank recover the property. The application is yet to be even listed for hearing. Even if SBI gets physical possession of the property, all it will manage is to dent Mallya's ego. The value of the villa, though higher than Kingfisher trademarks, is barely a fraction of the Rs 1,600 crore that Mallya owes SBI. Another one of 'irrecoverable' properties was Kingfisher House, measuring over 17,000 square feet in Mumbai's suburban Andheri locality, which was given as a personal guarantee by Mallya. The property was originally hypothecated to Punjab National Bank in 2010 and Kingfisher Airlines owes the bank Rs 290 crore. Kingfisher Airlines refused to part with the property and the matter is currently listed in the Chief Metropolitan Court in Mumbai after SBI filed an application under the securitisation and reconstruction of financial assets and enforcement of security interest (SARFAESI) Act, 2002. Sumanto Bhattacharya, spokesperson of the UB Group, denies playing hardball, "Kingfisher House is owned by Kingfisher Airlines Ltd and not Mallya. Kingfisher Villa is owned by United Breweries (Holdings) Ltd and not Mallya. In any case, Kingfisher Airlines Ltd is a party defendant to proceedings filed in the Goa courts by United Spirits Ltd in respect of Kingfisher Villa and since the matter being sub-judice it won't be appropriate to comment on it." Other banks caught in Kingfisher's loan trap Perhaps more curious is the case of Indian Overseas Bank. The airline owes IOB a sum of Rs 108 crore for which it had mortgaged two helicopters in 2008. IOB did not respond to dna's questions on the whereabouts of the choppers. It is believed that the Eurocopters were not in flying condition and the bank is struggling to dispose them of to recover its bad debts. IOB is now a loss-making bank having posted a Rs 516-crore loss this quarter. There are other smaller banks in the consortium which have lent money to Kingfisher Airlines after being pledged the airline's current assets. Central Bank of India gave a term loan of Rs 350 crore on the condition that all sale proceeds and lease rents would be remitted in an escrow account with the bank. The airline was grounded within a year and the bank couldn't recover the money. Banks like Corporation Bank, State Bank of Mysore and Vijaya Bank gave loans of close to Rs 400 crore after being pledged all movable assets, movable assets and plant & machinery of the airline.

5. Many of the banks have reached a dead end. A realisation has dawned on them that Rs 7000 crore of public deposits they lent to Kingfisher Airlines have vanished in thin air. Chances of even recovering even a fraction of the amount seem to be fading by the day. Was IDBI ex-CMD behind Rs 900-cr loan to Vijay Mallya’s airlines? Yogesh Agarwal, former CMD of IDBI Bank, may have played a key role in sanctioning loans worth Rs 900 crore to Vijay Mallya’s Kingfisher Airlines (KFA) despite the carrier’s low credit ratings, a CBI probe has revealed, sources said. KFA had applied for a “corporate loan” of Rs 950 crore on October 1 of 2009, out of which around Rs 900 crore was sanctioned in three installments by November 19 last year by the bank’s credit committee, the source added. The CBI is looking into the minutes of an alleged meeting held between Mallya and Agarwal on October 6 last year to see if it led to the issue of the sanction subsequently, he added. “The then CFO of KFA, A Raghunathan, who was named in CBI’s First Information Report of July last year, had twice written to the IDBI top brass, requesting to expedite the loan’s sanction process, and referred on both the occasions that a “meeting” was held between Mallya and Agarwal in this regard.” When contacted by HT, Aggarwal said: “I don’t want to comment on this issue.” Read: Kingfisher loan default case: ED summons IDBI Bank, KFA officials Raghunathan had written to the bank to expedite the sanction of the loan despite the fact that KFA allegedly did not meet the conditions stipulated under the bank’s corporate loan policy on account of “negative financials” and inadequate credit ratings, the source added. The loan application was signed by Raghunathan. “Twice the CFO wrote to the bank, citing a meeting between Vijay Mallya and the then IDBI CMD, and things began moving fast,” the source said. “The loan was okayed by the bank’s credit committee with Agarwal’s approval.” The UB Group has denied any wrongdoing so far. Bank of Baroda finds Rs 6,000 crore of illegal forex transfers NEW DELHI: Bank of Baroda officials recently stumbled upon illegal transfers of a whopping Rs 6,172 crores in foreign exchange, made to Hong Kong through newly-opened accounts in the bank's Ashok Vihar branch. The Congress revealed details of the case at a press conference on Friday. The bank was alerted to the scam when it found that the forex business of its Ashok Vihar branch shot up to Rs 21,529 crores during 2014-15 - an increase of more than 500 times -- from Rs 45 crores in 2013-14. Between August 1, 2014 and August 12 this year, there were 8,667 forex transactions from the branch, prompting the bank to look into the increase. An internal investigation by the bank revealed that the transactions did not trigger alerts such as the generation of an exceptional transaction report by the branch in North Delhi. The income tax department and other agencies were also oblivious to the transactions despite amounts transferred adding up to several crores a day. TOI tried several times to reach BoB executive director B B Joshi for more details, but he was unavailable. Investigations showed major irregularities, because the forex transactions were done mainly via advance remittances for import, through newly-opened current accounts. Heavy cash transactions -- sometimes four or five times a day -- were also noticed. BoB's internal audit team recently red-flagged the irregularities to the finance ministry. It is not clear yet whether this money belongs to an entity, or a group of people, that wanted its black money sent abroad. Central agencies like the CBI and the ED are likely to soon investigate the matter, said sources. The revelation comes at a time when the Narendra Modi government is trying to ensure that black money does not flow abroad, and instead comes back into the country. The Congress said the irregularity punched holes in Prime Minister Modi's claim that there have been no scams since he assumed office. The Congress alleged that the amount, made up of "black money", was sent out of the country through a series of bank transaction two months after the Modi government took charge at the Centre last year. "Leave alone Vyapam, Lalit Modi or the Chhattisgarh rice scam, I want to tell the PM that this scam is happening in Delhi right under the nose of the Centre," Congress spokesperson R P N Singh said. He added that for the past two days in Bihar, the PM has been saying that there has been no scam since his government took over, and he has repeated the same thing in his speeches abroad. "The bank is in Delhi and the government has all the information about the scam as the audit report was sent to higher authorities. BJP has been talking about scandals. So many scams are coming out, but the PM says that there is not even one allegation against him.

6. We are placing proof of the scam," Mr Singh said, demanding an independent investigation into the transactions. The Congress claimed that the government has been aware of the scam for the past two months, since the time the bank submitted the inquiry report. The Congress spokesperson wondered why no FIR been filed in the case so far. He said such a scam could not have been carried out without the "complicity" of top officials in the banking network and finance ministry. "One is forced to wonder as to how a government bank did not adhere to the very basic due diligence as regards deposits, transfers and withdrawals by any entity," Singh alleged. In its audit report, the entries for remittances -- many of which were done manually -- have allegedly been fudged and many of them have been made by punching the exchange rate as Rs 0.0001 to a dollar when the prevailing exchange rate was Rs 60 to a dollar. While the remittances for exports and imports were normal, suddenly there was a spike of Rs 6172.92 crore transactions in the form of advance remittances for import. "Most of the foreign exchange related transactions were carried out in the newly opened current accounts of some 59 companies," the report reveals. There were heavy cash receipts also in newly opened accounts of some importers. The investigation report accessed by TOI adds that the amount was remitted as advance for imports, and in most of the cases, the beneficiary was the same (such as Victroxx International Ltd, Great Asian Exports, King Winner International Ltd, Star Exim Ltd, I touch Infocomm Ltd, Fortune Trading Pvt Ltd, Jasco Ltd, Mega Forwarders and Traders etc). The amount remitted in all the transactions was less than $100,000. The remittances in all cases were made to Hong Kong, said the report. "It was observed that on many occasions, the party made 4/5 remittances in a single day to the same exporter and the total amount of all the remittances was more than $100,000. 4-5 remittances were probably done to keep the amount of each remittance less than $100,000," adds the report. Explaining the modus operandi , the report states that the branch was in the practice of consolidated reporting of forex transactions against large number of public bills. Docket numbers were not obtained/generated for each remittance and despite heavy advance payments for imports being made to the same suppliers, credit reports of the suppliers were not obtained. And wherever credit reports are available with the branch, the same contained adverse remarks. "The branch has not adhered to due diligence while remitting advance payment for imports," says the report. Subsequently, A-1 form in most of the cases was not signed by the branch head/bank official and in many cases by the customer. It adds that "in most of the cases mode of shipment, date of shipment and place of shipmen are not mentioned in the proforma invoice" and "bill of entry/evidence of imports was not obtained before making further remittances to the same supplier". No effort was made by the bank to obtain evidence of import/bill of entry from importers. India ranks 4th in black money outflows per annum: Report WASHINGTON: India ranks fourth in black money outflows with a whopping $51 billion siphoned out of the country per annum between 2004-2013, a US-based think-tank's report said on Wednesday. Notably India's defence budget is less than $50 billion. China tops the list with $139 billion average outflow of illicit finances per annum, followed by Russia ($104 billion per annum) and Mexico ($52.8 billion per annum), according to the annual report released by Global Financial Integrity (GFI), a Washington-based research and advisory organisation. The illegal capital outflows stem from tax evasion, crime, corruption and other illicit activity, the report said, according to which a record $1.1 trillion flowed illicitly out of developing and emerging economies in 2013, the latest year for which data is available. In all, during this decade-long period of 2004-2014, GFI estimates that more than half a trillion ($510 billion) went out of India and in the case of China the figure was $1.39 trillion and Russia $1 trillion. Titled 'Illicit Financial Flows from Developing Countries: 2004-2013', the study shows that illicit financial flows first surpassed $1 trillion in 2011 and have grown to $1.1 trillion in 2013, marking a dramatic increase from 2004, when illicit outflows totalled just $465.3 billion.

7. China also had the largest illicit outflows of any country in 2013, amounting to a staggering $258.64 billion in just that one year, the report said. "This study clearly demonstrates that illicit financial flows are the most damaging economic problem faced by the world's developing and emerging economies," said GFI President Raymond Baker, a longtime authority on financial crime. "This year at the UN the mantra of 'trillions not billions' was continuously used to indicate the amount of funds needed to reach the Sustainable Development Goals. Significantly curtailing illicit flows is central to that effort," he said. Noting that Sustainable Development Goals (SDGs) calls on countries to significantly reduce illicit financial flows by 2030, the report said the international community has not yet agreed on goal indicators, the technical measurements to provide baselines and track progress made on underlying targets and subsequently the overall SDGs. In its report, GFI recommends that world leaders should focus on curbing opacity in the global financial system, which facilitates these outflows. Suicide Mystery and Corruption at IFFCO The farmers' cooperative with a turnover of Rs 21,000 crore comes under a cloud after the sudden death of its chairman and an ED probe into graft charges against its CEO Sandeep Bamzai July 9, 2011 On January 17, Surinder Jakhar, chairman of India's fertiliser behemoth, Indian Farmers Fertiliser Cooperative Limited (IFFCO), with a turnover of Rs 21,000 crore in 2010-11, was found dead in his farmhouse in Abohar, Punjab. Jakhar was the son of senior Congress leader Balram Jakhar, who served as Lok Sabha speaker, Union agriculture minister and Governor of Madhya Pradesh. His body was riddled with bullets. The police closed the case saying it was an accidental death-Jakhar shot himself while cleaning his gun. The police never explained how an accident with a non-automatic weapon could have led to his body being riddled with bullets. The sheer number of bullets fired also seemed to rule out suicide. There were apparently no eyewitness. What adds to the mystery is the letter that the Central Vigilance Commission (CVC) wrote to the Enforcement Directorate (ED) a few months earlier, asking it to investigate IFFCO Managing Director (MD) and Chief Executive Officer (CEO) Uday Shankar Awasthi, 66. Allegations of a lavish lifestyle and accusations of running the cooperative like a fiefdom prompted the CVC to take up the matter. Awasthi has been running IFFCO, which has a pan Indian footprint and is the umbrella body for 37,000 smaller cooperatives, for close to two decades. Under his leadership, IFFCO's Vision 2015 aims to achieve a production target of 15 million tonnes and a turnover of Rs 30,000 crore, 50 per cent higher than the turnover recorded in 2010-2011. An art aficionado, Awasthi even got the MD's retirement age hiked to 65.

8. The CVC's letter to the ED alleged irregularities in the procurement of phosphoric acid and other raw materials for fertiliser production from certain African countries, Senegal being one of them. The CVC's complaint suggested that Awasthi, as MD, favoured firms that paid a consideration to a company, Catalyst Business Solutions, run by his son Anupam and Amol Awasthi. According to the CVC, Catalyst has offices in several countries-Senegal, the UAE, Cameroon, Egypt, Ivory Coast, Nigeria, India and the USA. The CVC's reference to ED lays out specific allegations. Most of them relate to tax and foreign exchange violations, hence the reference to ed to investigate. They include: • A tax and foreign exchange fraud to the tune of Rs 5 crore per month for the past seven years. The total amount involved comes to Rs 420 crore. • Catalyst has no self-acquired business or revenue. It over-bills companies like Industries Chimiques du Senegal (ICS) of Senegal, and then shows a loss to avoid tax. • Awasthi is involved in money laundering. • Awasthi earned illegal commission on imports of raw materials and finished fertilisers. • Awasthi purchased a posh bungalow for himself from cooperative funds. IFFCO's PR manager, who replied to India Today's email sent to Awasthi, denies any wrongdoing on the part of the IFFCO MD and denies an ED probe is on (see box). His claims, however, run counter to the ED's ongoing investigation. In mid-April, ED Deputy Director Prabhakant wrote to his director, Arun Mathur, on the status of the investigation against Awasthi and others. The contents of the three-page status report FO T-3/Misc/73/2010/AD (RS)/VM, based mostly on the CVC's reference, are extremely damaging for Awasthi. ED sources told India Today, "Detailed investigations are on with foreign enquiries being the bulwark. We continue to focus on Awasthi and his two NRI sons-Amol and Anupam. We are also focusing on companies that his sons have spawned around the world and the contracts that they have signed. We are also looking at IFFCO's procurement patterns vis-a-vis global suppliers." Earlier, a reference had been made to the Reserve Bank of India (RBI) to collect documents with relevance to the case. After many reminders, RBI had responded on October 29, 2010 that Catalyst Business Solutions had received 35 inward remittances amounting to over Rs 10 crore between June 2005 and January 2010. Of these remittances, the company reported 29 remittances after the expiry of the 30-day stipulated period in terms of para 9(1)(A) of notification number 20 of the Foreign Exchange Management Act (FEMA). The company allotted shares to foreign investors on four occasions but did not report it to RBI in time, that is, within 30 days of the allotment. IFFCO's response to India Today categorically states: "We are not aware of any RBI investigation against Awasthi. We are also not aware of any letter rogatory having been issued to any country." Based on the information received from the RBI, the ED has decided to dig deeper and also procure additional documents by sending a letter rogatory to Senegal and USA to ascertain facts in its investigation into the matter, a matter once again disputed by IFFCO. Also, a directive has been issued under the provisions of fema to Amol Awasthi, chief operating officer of Catalyst Business Solutions. This was followed by a summons. IFFCO, meanwhile, continues to take refuge behind the plea that the Awasthi siblings have nothing to do with the company. In response to the ED summons, P.K. Roy, MD of Catalyst, said that Amol Awasthi was an NRI and non-executive director of the company. ED issued summons to his brother Anupam, CEO of the company. The company replied that Anupam was also an NRI. Documents reveal that Catalyst Business Solutions has received foreign investment and engaged in the import of capital goods and export of services. ED has also recorded the statement of Roy under Section 37 of FEMA with regard to overseas establishments and businesses in and outside India. ED has issued another set of summons to Amol, Anupam and Roy. A notice has also been sent to IFFCO. ED received a reply from IFFCO which furnished details of imports, remittances sent out of India in the last five years, break-up of wholly owned subsidiaries/joint ventures and details of FDI in the last five years. The documents are under examination. ED's probe has seen directives being issued to the bankers of both Anupam and Amol Awasthi. Replies have been received and these too are being scrutinised. The dragnet is tightening as the ED chases the quarry. Multi-national re-insurance brokers violate Indian laws Multinational Insurance brokers are expected to infuse knowledge and expertise into insurance and reinsurance business in India. However, instead of supporting the Indian insurance industry and the Country, multinational brokers have started large-scale alleged cheating and looting the industry and finding ways and means to breach or circumvent Indian laws, insurance experts say. After the Insurance Regulatory and Development Authority of India, (IRDAI) cancelled the license of Wills India - the third largest re-insurance brokers in the world - for financial irregularities; it still continues to do huge business in India - backdoor through Almondz Brokers, India. Clandestinely all expenses are reimbursed to Almondz by Wills Risk Services India, as it does not need IRDAI clearance to operate or move funds in and out of the country – a clear case of cheating that is challenging the foundation of the IRDAI, the reinsurance experts aver.

9. To quote a recent example there was a serious fraud committed by Almonds re-insurance Brokers, in Aug 2014, to the tune of Rs.13 Crores. Interestingly, Swan Insurance Company, Singapore paid re-insurance premium to Willis, Singapore, who had to pay to the re-insurer, namely KILN Singapore, for a Trade Credit Insurance. Surprisingly Willis, Singapore chose to route the re-insurance premium through Almondz Brokers in India. The re-insurance money was required to be paid to KILN Singapore, but it never reached KILN. Almondz had opened a fictitious Bank Account in the name of KILN Global Pte Limited and transferred the money in to that account by using forged documents and siphoned the funds. Technically there is no re-insurance cover since the re-insurance premium was never paid and the client and the insurance company were fooled, the experts who are in the know of things say. Opening a Bank Account through forged documents by a broker, for that matter by any entity, is a serious criminal offence. The matter was reported to the Deputy Commissioner of Police, Economic Offence Wing New Delhi for necessary investigation. The matter was also reported to IRDAI, which had remained a mute spectator till date. Banking System was thus used for these illegal transactions and there has been no inspection by the RBI, FERA or by IRDAI to know the volume of illegal business done. Being a banned entity, this transaction exposes either the weakness or hand in glove operations of the Regulator, and thus the industry can't depend on the either the Regulations or the Regulator, the experts aver. Rerouting the Business through this mode, ends the insurer with no re-insurance but given to believe that he had been covered. When the insurer is in Singapore, reinsurer is in Singapore, bank too is in Singapore, there is no reason to route the transaction through India, except to siphon the money, by ulterior motives. Similarly, Indian operations of Marsh, one of the largest brokers in the world, are under Government scanner for illegally transferring large sums of money out of the country to their overseas companies in low tax regimes. The Enforcement Directorate and Research and Analysis Wing (RAW) are now seized of the matter. Marsh began operations in India seven years ago through the FDI route by investing 26 percent in Marsh India as per the Insurance Regulations. The license fee for the composite broker license is Rs.2.5 Crores which for 26 percent translates to Rs. 65 lakh. During the first four years, they have transferred out of the country, approximately Rs.40 Crores by way of “service charges” and “risk management fee” to Marsh Overseas operations, primarily in Singapore. This was a serious objection from the Income Tax Department under the “transfer pricing rules” and the matter has simultaneously been referred to the Enforcement Directorate (ED) for foreign exchange violations and misuse of the FDI rules. The Indian partner has been cheated of these profits, says insurance experts but the union government chose to turn a blind eye to the large scale fraud, they say. The Income Tax (IT) department has ordered a penalty of Rs.4.84 Crores and will initiate further legal proceedings against Marsh India Insurance Brokers, a joint venture of US based Marsh USA and Marsh India. Marsh India is facing transfer pricing charges for transferring large sums of money out of India to associate enterprises in low-tax regimes. The IT department assessed Marsh India’s books for the assessment year 2010-11. During the period, Marsh India had posted an operating income and profit of Rs.62.33 crores and Rs.17.8 crores, respectively, against Rs.52.07 crores turnover in assessment year 2008-09. In assessment year 2010-11 Marsh India reported total income from international transactions are Rs.20.29 crores. The department said looking from the balance sheet the company was to receive Rs.7.29 crores from debtors, of which Rs.1.53 crores was receivable from its associate enterprises as on March 31, 2010. The department issued a show-cause notice asking why notional interest at 12 percent could not be calculated on the outstanding balance from the associate enterprises. Marsh India has said “In connection with this query raised by the department, we are working with them to resolve this quickly. In the consulting sector, there is no custom to charge interest on delayed receivables. Unlike a trader, a consultant does not normally have a contractual right to receive interest on delayed receivables.” Even where a right is available, it has not come across instances where a consultant has charged the client interest on delayed receivables. It is only where the matter travels to the court and the court grants interest that a consultant actually receives such interest. Transfer pricing does not and cannot contemplate an adjustment which would result in a transaction that would be outside the ordinary court of business”. Another case of cheating was with Gujarat State Petroleum Corporation – GSPC. For many years, Marsh India was the broker placing the insurance of the GSPC assets on behalf of Oriental Insurance Company Limited. Two years ago, the management of GSPC decided to transfer the business from them and it was found that there were serious irregularities in the reinsurance made by Marsh India including grossing up the premiums. Yet the union government and state governments did not wake up from the slumber. GSPC conducted detailed investigations by the ED who have called for all the files from Oriental Insurance Company Limited. GSPC has blacklisted Marsh India from all business. It also reported the matter to the central investigating agencies. Three years ago Marsh India had messed up with the reinsurance placement of Air India. This had cost Air India and additional Rs20 Crores in premiums and could not recover the claim in full the unfortunate Mangalore air crash. Marsh India is headed by CEO Sanjay Kedia who is responsible for the closure of JLT operations in India after a large Reliance Industries Limited SBM claim was not resolved due to incorrect reinsurance placement. The matter is in the courts and Oriental Insurance and New India have joint liability in excess of Rs.1000 Crores. Strangely, JLT plans to return to the Indian market through another source although this huge money is due to India by foreign companies through the intermediary of JLT. Sanjay Kedia is known over the years for paying large sum of money to the PSU Insurance Companies namely, Oriental Insurance, New India Assurance, National Insurance, united India Insurance and GIC. Similarly, it is learnt that Aon, one of the largest broker in the world, has taken more than 26 percent holding in the Indian joint venture against the Insurance Regulations. The matter was referred to IRDAI by FIB and ED and action from IRDAI is still pending. IRDAI is taking serious action against such grave violation of the law by these large multinational brokers, who seem to simply want to take advantage of the Government regulations for their selfish benefits and urgent action is required to stop this blatant plundering of the country at cost of domestic insurance. Experts say that Union Finance Ministry should step in at least now to stem the rot before it becomes too unwieldy and goes out of hands and ruin the Indian economy. How does it affect the Indian economy? Insurance experts aver that when the economy is opened for capital inflow through FDI, money is siphoned out of the country, through these means, with total disregard to the law of the land. Total loss of money to the Government is yet to be estimated and if this goes unchecked India will become like Bermuda or Mauritius. Insurance Regulator, if equipped with powers of Government through the new insurance bill, and if the Regulator turns blind or is not aware of these type of transactions, the entire insurance industry will collapse because, the transaction relates to not for insurance but to “re-insurance.” The overseas entity, if allowed to get into these type of transactions, the entire broking system would collapse. If the Regulator either allows by remaining mute or the Regulator has no clue of what is happening, the entire insurance business will be in jeopardy. Also, these foreign entities, use regulators silence to these grave issues, even after repeated reminders from various lobby, as not just an opportunity, but the correct way to do illegal business and enrich through illegal means. The Rs 6,500-Crore Mystery At Mukesh Ambani’s Reliance Industries Limited By PARANJOY GUHA THAKURTA AND JYOTIRMOY CHAUDHURI | 4 February 2015

10. Some financial transactions attract attention because of the scale and nature of the irregularities being brought to light. Others may warrant scrutiny because of the profile of the people involved. The case in this article deserves close examination on both counts. The protagonist of this tale is India’s richest man, Mukesh Ambani, the chairman and managing director of Reliance Industries Limited (RIL), India’s biggest private corporate conglomerate. The supporting character is a former Indian National Congress member of parliament associated with the Reliance Group, Annu Tandon. On the sidelines are unnamed executives from the overseas wing of one of India’s biggest private sector banks, ICICI (formerly the Industrial Credit and Investment Corporation of India) Bank. The plot also includes officials from two regulatory authorities, the Reserve Bank of India (RBI), the country’s central bank and apex monetary authority, and the Enforcement Directorate (ED) in the Ministry of Finance, which is responsible for enforcing the Foreign Exchange Management Act (FEMA) of 1999. It was on 19 July 2013, about a year and a half ago, that the ED wrote to the RBI, seeking its advice on the legality of a loan of Rs 6,530.36 crore that was granted by an overseas branch of ICICI bank to a now-defunct firm called Biometrix Marketing Pte Ltd that was based in Singapore and associated with the Reliance Group. Curiously, this money, given in the form of a loan, later returned to India—as alleged by First Secretary (Economic) GT Venkateswara Rao of the Indian High Commision in Singapore in the investigation he conducted on investments made by Biometrix in Reliance Group companies—as foreign direct investment (FDI) through the issuance of certain financial instruments called compulsorily convertible preferential shares (CCPS) by Biometrix in four Reliance Group companies—Reliance Gas Transportation Infrastructure, Relogistics Infrastructure, Reliance Ports and Reliance Utilities. This investment was the highest inflow of FDI into India during 2007–08 from a single corporate entity based in Singapore. Senior officials of the ED have said that, since the letter was written, Annu Tandon and other senior figures connected with RIL have been questioned about the transactions relating to Biometrix and their statements have been recorded. Rao's investigation into Biometrix's investments was first suggested in July 2011 by the Department of Industrial Policy and Promotion (DIPP) in the Union Ministry of Industry and Commerce, which is responsible for formulating and enforcing policies on FDI. The investigation was thereafter conducted by the High Commission of India in Singapore, which resulted in the preparation of a “commercial intelligence report” dated 31 August 2011. The report pointed out that the records of Singapore’s Accounting and Corporate Regulatory Authority (ACRA) indicated that Biometrix was a holding company registered in Singapore. A company called Strasbourg Holdings Private Limited held 91 percent of Biometrix. Strasbourg is incorporated in Singapore and is owned by Atul Shantikumar Dayal, a legal expert with AS Dayal & Associates, Mumbai, who has been of particular assistance to the Reliance Group in some of its recent arbitration cases against agencies of the Indian government, and who is also a director of a few Reliance Group companies. The remaining 9 percent of Biometrix’s shares were held by Reliance GeneMedix Plc, a company registered in London and a subsidiary of Reliance Life Sciences Private Limited (RLSPL). Biometrix was earlier called Orna Pte Ltd, and its principal activities are described as “acting as a holding company and consultancy.” Many India-based corporate conglomerates, in particular the Reliance Group, maintain a complex structure of cross-holdings of shares among subsidiary and associate companies. Theoretically, these cross-holdings are perfectly legal. However, the patterns of shareholdings of these companies are often made deliberately complex to make it difficult for regulatory authorities to lift the corporate veil and establish the identities of the beneficiaries. If their identities are obfuscated, it makes it cumbersome to establish an audit trail to track the flow of funds. This case, in particular, appears to use a set of such complex control structures. Right now, the dispute is stuck at a preliminary stage. Two formal letters that were sent by the joint director of the ED on 21 and 22 May 2013, elicited only a single reply, dated 19 July 2013, from Divya P, a manager in the foreign exchange department in the central office of the overseas investment division of the RBI in Mumbai. In its reply, the RBI stated that borrowings by an “overseas WOS (wholly owned subsidiary) / JV (joint-venture), (a) first level step down subsidiary or subsidiaries beyond first level, with support from the Indian party for purposes of investment back into India” was not a “bona fide business activity as per FEMA guidelines framed in 2004.” The country’s central bank added that the case was being examined by officials in the RBI’s Department of Banking Operations and Development and that the apex bank would respond to the ED in due course. Representatives of the Reliance Group have claimed to the ED that the investments should not be treated as FDI but as an external commercial borrowing (ECB). If the investment is indeed an ECB, this would put Reliance in the clear and in compliance with the RBI and provisions of FEMA. This is the crux of the dispute. Did the money return from Singapore to India as FDI or as an ECB? If the money did indeed return from Singapore as an FDI, then there is reason to pay attention to the possible source of these funds. Prashant Bhushan, a lawyer and founding member of the Aam Aadmi Party(AAP) offered an interesting explanation to this question at a press conference, which we will come to later in this article. In June 2011, the Comptroller and Auditor General of India, had made note of anomalies in the capital cost of the RIL natural gas project in the D6 block in the Krishna-Godavari (KG). The CAG’s report stated that Reliance had over-invoiced their imports of capital equipment during the project. Taking off from this report, Bhushan alleged that the funds transferred from Biometrix had been illegally obtained through RIL’s fudging of its imports. To begin with, the mammoth investments, amounting to Rs 6,530.36 crore came from companies—Biometrix and Strasbourg—which had relatively small equity capital bases. Biometrix was set up with an equity capital of 110,000 Singapore dollars—or approximately Rs 29 lakh—and operated out of “just one room, which was closed most of the time.” Rao’s report added that the premises where Strasbourg was registered was occupied by another firm named Rikvin (about which, too, more interesting information will follow). Filings with ACRA, reviewed by the Business Standard indicated that between May 2007 and September 2008, Biometrix made a loss of Rs 400 crore on a revenue of 121,433 Singapore dollars (approximately Rs 32 lakh). Its total liabilities to equity ratio was an improbable 4,637 because it had obtained a $1.7 billion Singapore-dollar loan with a capital of 110,000 Singapore dollars (approximately Rs 29 lakh). ACRA’s records show that Biometrix has been dissolved and that its members voluntarily wound up the company. Business Standard also reported that the loan obtained by Biometrix had been paid off. Rao’s investigations through the High Commission of India in Singapore point to several suspicious facts that deem this case worthy of close scrutiny. He also stated that it was highly probable that the funds shown as loans from Singapore or other “tax heavens” [sic] returned through a “circuitous route” to companies whose owners were in India. Therefore, he argued, the source of the money needed to be ascertained. On 22 June 2012, M Furquan, a Delhi-based journalist, wrote to the Central Vigilance Commission (CVC) and the Central Bureau of Investigation (CBI) asking the two agencies to investigate whether or not the transactions were legal. His allegation was based on certain documents—including first secretary Rao’s report from August 2011—that he claimed to have received from a reliable source through registered post. After he received no response from either the CVC or the CBI, he filed a writ petition in the Delhi High Court on 17 November 2012. Furquan pointed out that during the period between March 2007 and October 2008, RIL's warrants worth Rs 16,500 crore were converted into equity shares by Reliance Utilities Private Limited, Reliance Ports & Terminals Limited, Relogistics Infrastructure Limited and Reliance Gas Transportation Limited as per the records of the Bombay Stock Exchange and the National Stock Exchange. The holder of a warrant can purchase securities, usually equity shares, from the issuer at a specific price within a certain time frame. Furquan’s petition alleges that the money required for converting RIL’s warrants into shares by the four RIL subsidiaries came from none other than RIL itself as none of the four subsidiaries had shown a commensurate amount of external or bank borrowing and neither did they have any influx of income of such magnitude.

11. He alleged that part of this money came into RIL in the form of a loan of $1.7 billion Singapore dollars—approximately Rs 6,500 crore at the time—from Biometrix, which was “shown as subscription money for preference shares (CCPS) [compulsorily convertible preferential shares] issued by Reliance Utilities Private Limited, Reliance Ports & Terminals Limited, Relogistics Infrastructure Limited & Reliance Gas Transportation Limited.” This means that Biometrix raised the money from ICICI on the ground that it sought to buy CCPS shares issued by the four subsidiaries. Furquan subsequently claimed that, after his petition was filed in court, Swatantra Kumar, Director General, Income Tax (Investigation), who was based in Mumbai, had commenced a probe into the transactions relating to Biometrix and companies in the Reliance Group. However, Kumar was suddenly transferred to Chandigarh in December 2012. The case itself is still pending in the Delhi High Court. We were able to gain access to the documents submitted by Furquan in court. Among these is a letter written by LV Merchant, Director, RLSPL, to MG Attri, Assistant Director, ED, on 14 August 2012 which makes the holding structure of Biometrix and its relationship with RIL extremely clear. The letter states that 49 percent of the shares of Reliance Holding Netherlands BV (RHBV), Netherlands, were held by Reliance Clinical Research Services Pvt Ltd (RCRS), which is a subsidiary of Reliance Life Sciences Pvt Ltd (RLSPL). The remaining 51 percent was held by RLSPL. In 2006, RHBV acquired 79.58 percent of GeneMedix Plc—a company listed on a stock exchange in London—with the balance being held by public shareholders. GeneMedix acquired Biometrix in 2007, thus making it an “indirect subsidiary” of RLSPL. Biometrix’s loan from ICICI Bank was taken under a “Put and Call Option Agreement” with Ekansha Enterprises Private Limited, a group company of RLSPL. An option agreement between two companies—in this case between Biometrix and Ekansha—provides either of the two firms with the right, but not the obligation, to buy, sell or obtain a specific asset at an agreed upon price at some time in the future. Between 2006 and 2008, when the transactions involving Biometrix took place, Atul Shantikumar Dayal was a director of thirty-two companies, quite a few of which were part of the Reliance Group, including Reliance Power Ventures Ltd, Reliance Enterprises Ltd, Reliance Petroleum Ltd, Ekansha Enterprises Pvt Ltd and Strasbourg Holdings. As mentioned earlier, Dayal is reportedly a close adviser to the Reliance Group on corporate law, indirect taxation and, notably, international commercial contracts. According to the ED report, Strasbourg Holdings was acquired from Dayal by the late Sandeep Tandon, husband to Annu Tandon. The acquisition was made through a remittance of US$100,000 (approximately Rs 48 lakh) to Singapore under the liberalised remittance scheme (LRS) of the RBI that was announced in February 2004. Under the LRS at that time, resident Indians were allowed to remit up to $125,000 (approximately Rs 60 lakh) in each financial year for any permitted capital and/or current account transaction or a combination of both. Sandeep Tandon was a former officer of the Indian Revenue Service (IRS) who used to work in the ED. He had conducted an investigation into foreign companies floated by Reliance while he was in the Directorate. He had raided the residence of Tina Ambani (nee Munim) before her marriage in February 1992 to Anil Ambani, the younger and now estranged brother of Mukesh Ambani. Soon thereafter, Sandeep Tandon joined RIL in 1994 as a consultant. His wife, Annu Tandon, was elected as the Lok Sabha MP from Unnao, Uttar Pradesh, in the 2009 elections. An unlikely candidate with no previous political experience, she claimed a surprise victory and won by a large margin of 32,092 votes, defeating her rivals from the Samajwadi Party (SP) and the Bahujan Samaj Party (BSP). Annu was managing director of MoTech Software Ltd., which had been promoted by Mukesh Ambani. In 2007, MoTech was one of twelve entities that came under the scrutiny of the Securities and Exchange Board of India (SEBI) over charges of insider trading in the shares of Reliance Petroleum Ltd (RPL). On 3 January 2008, two months after the RPL transactions, she resigned from her position, citing her decision to contest elections from Uttar Pradesh as the reason. At the time, there was speculation in the media that seat-sharing talks between the Congress and SP in Uttar Pradesh fell through because of the Congress’s insistence on Annu Tandon’s candidature. The Hindu on 30 April 2009 hinted that her husband’s allegiance to Mukesh Ambani was a reason for the SP to walk away from the alliance. The SP, as was widely known, was closer to the younger Ambani sibling, Anil, when the brothers crossed swords over the division of the Reliance empire. In the 2014 Lok Sabha elections, Annu Tandon stood for election again, but came fourth, barely retaining her deposit with 16 percent of the votes. In his commercial intelligence report, First Secretary Rao of the Indian High Commission in Singapore pointed out that another company called Rikvin was located at the same Cecil Street address as Strasbourg Holdings. This company had an equity capital of 110,000 Singapore dollars (approximately Rs 29 lakh), and its only shareholder was Dayal who held the entire 125,000 Singapore dollars (approximately Rs 33 lakh) paid-up share capital of the company. Rikvin had another director—Shalin Narain Tandon—who, however, did not own any shares in the company. Shalin is, incidentally, the son of Annu and the late Sandeep Tandon. Shalin is also the vice president of the group’s flagship company RIL. Additionally, he is on the board of Ekansha Enterprises Pvt. Ltd, which in turn, is associated with two companies linked to RIL—Reliance Consolidated Holdings Pvt. Ltd and Relcom Venture Capital Pvt. Ltd. The senior officials in the ED have said that both Shalin and Annu Tandon, as well as Dayal have been questioned. The RBI is yet to respond to the ED’s query on whether certain transactions by RIL violate the provisions of FEMA. Both the Reliance Group companies—Strasbourg and Ekansha—applied to the RBI for compounding for their violation of the FEMA act as noted by the RBI. Ekansha paid Rs 19.59 crore to the RBI as the fee for compounding. An application on behalf of the late Sandeep Tandon, for Strasbourg, is still pending with the RBI. We contacted RIL, Dayal and Tandon for comment, but our questions went unanswered. If the RBI confirms that the transaction was illegal, the ED can proceed against the Reliance Group companies either through a process of adjudication through the special directorate of the ED, or through the RBI by compounding the offence. The RBI incidentally has the power to lower the compounding award given by the ED. Information about this unusual transfer of funds was brought into the public domain for the first time by Prashant Bhushan at a media conference on 27 February 2014. Bhushan pointed out that the Indian High Commission in Singapore had made enquiries about Biometrix following a request by the DIPP in 2011, but the government had failed to act on the information provided, even after three years. After Bhushan’s conference, RIL released a press statement in which it denied that its legal adviser, Dayal, was either the owner or the director of Biometrix. With reference to the loan given by the Singapore company, RIL stated: The investments by Biometrix were open, transparent and perfectly legitimate transactions in full compliance with the extant regulations. These investments in the Indian companies were made by Biometrix out of loans raised from ICICI Bank, Singapore branch. ICICI Bank has confirmed this fact to the regulators. Regulatory authorities have fully investigated the matter and found no substance in the allegations of money laundering. The insinuation that this money was from “gold plating” from KG-D6 is completely irresponsible and false. Bhushan, in a letter dated 8 July 2014, to the Special Investigation Team on black money—formed by the government on the orders of the Supreme Court—alleged that the government “has just sat over these facts [relating to Biometr

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