NEW DELHI: The Central Bureau of Investigation (CBI) is conducting a comprehensive analysis of alleged hawala transaction, siphoning of funds and suppression of evidence related to nexus between Income Tax (I-T) officers and Vadodara based Sterling Biotech Limited. The CBI claims a diary seized from the company premises indicates that the firm under the scanner was allegedly using hawala routes to transfer money in India and abroad.
The New Indian Express has accessed the diary entries and other documents that shows money was sent to US, Dubai and even Bengaluru through the hawala route. A diary entry reveals hawala charges of Rs 1.25 lakh on an amount of Rs 3.5 crore sent to Bengaluru. Top CBI officials said the evidence was deliberately buried by I-T officers and no further enquiry was conducted in the last five years.
“Evidence collected at this stage reveals that money was transferred to USA, Dubai and Nigeria on several occasions. In fact, cash transactions to and from places like Dubai and USA indicate that the transactions are part of a larger scheme to launder money. We are conducting further probe into these and are planning to seek the assistance of our foreign counterparts to unravel the game-plan,” the officials said.
The CBI investigators claimed I-T officers did not take notice of 92 offshore companies incorporated in tax havens and 37 companies registered in the USA despite having seized the documentary evidence. The CBI documents said: “Exhaustive evidence in the form of trust deeds, declaration of beneficial owners, bank documents, portfolio statements and email were found in the seized material. However, it is seen that neither the I-T investigation wing nor the officers concerned took cognisance of the proof in their possession and no further investigation was carried out.”
The diary, now in the CBI’s possession, suggests that cash receipts and payments from outside were recorded by the firm’s accountant by hand. An entry on May 9, 2011, shows that cash amount of `80 lakh was received from Dino Meria and it was sent through Angadia (cash courier) to an I-T officer at Delhi.
The CBI is also looking at quid pro quo deals by other government officials besides I-T officers. Investigators said the company is doing business with a government entity known as Indian Potash Limited and they have found entry related to cash payment to the tune of Rs 30 lakh against its managing director.
“The data seized from the company premises shows entry of Rs 10.12 crore under ‘Income Tax Miscellaneous’. These payments have been made between May 2, 2005, and June 17, 2011, just a few days before the searches and seizure of documents. A blank signed letter head of Canara Bank was also found in the search, which shows connivance of government officials,” the CBI documents said.
According to CBI officials, the proof collected during the investigation shows the extent of the firm’s reach and its clout with government functionaries, political persons, bankers and officials of the PSU and the scale of its operations outside the books through cash.
Benami companies, but no action by Income Tax officers
The CBI officials said a peon working with Sterling Biotech, named in the CBI case, was made director in a company. The evidence forwarded by the I-T said: “The peon Rajendra Kalekar in his statement admitted that the company was registered at his residential address, though he doesn’t know anything about the business and he only signs cheques whenever asked.” Office assistant Shiv Shankar Yadav is also the director in several benami companies. The documents suggest that the benami companies were used to channel the money.
“A handwritten note of the person in charge of these companies at Vadodara gives a bird’s eye view of the financial pooling and routing of entries through these entities. In the note seized from the premises at Vadodara, the routing of Rs 12.86 crore through the various entities of the group is clearly displayed. It can be seen that the money invariably comes back to the originating party after traveling through the officially disclosed entities of the group and the benami entities.”
“It is seen from the file that I-T officers did not initiate any independent verification with these named companies or with the persons who are employees of the group and were shown as directors of such companies,” the documents said. CBI officials claimed that the chartered accountant of the group on record admitted that purchases and sales were manipulated through these companies to inflate the turnover, and depreciation is claimed on fictitious assets and that export shown to UAE is also just a paper transaction.
“Seals, rubber stamps, bank account details and blank letter heads of these benami companies in India and some of those abroad were found and seized during the search. In spite of such overwhelming evidence, no further enquiry was conducted into any of these issues,” the CBI documents further said, adding that there is a clear lack of due diligence and devotion to duty on the part of I-T officers.