CBI books ex-Maruti MD Jagdish Khattar in Rs 110-crore loan fraud

The Central Bureau of Investigation (CBI) has registered a criminal case against the former managing director of Maruti Udyog, Jagdish Khattar, and his firm Carnation Auto India for allegedly selling the assets pledged with Punjab National Bank (PNB) against a loan and diversion of Rs 110 crore.
Khattar started his own company — Carnation Auto —— after leaving the automobile major in 2007. During the investigation, the central agency found that Khattar and his company had “dishonestly and fraudulently” sold the fixed assets worth Rs 66.9 crore for Rs 45.6 crore, without approval of the bank, whereas the assets were furnished as security. Further, after the sale, the borrowers did not deposit sale proceeds with the bank, the CBI said.

On Friday, the CBI had booked Khattar, his company and some bank officials in the case under criminal breach of trust, cheating and criminal misconduct. According to the norms, the bank officials are required to verify the stock every month and also to cross check the debtors, which appears to have not been done, CBI noted and said the role of these officials will be looked probed.
Explaining the modus operandi, the CBI said Carnation took a loan of Rs 170 crore from PNB in 2009, which had turned non-performing assets in 2015. The bank had conducted a forensic audit through K G Somani & Company. According to the audit report, the accused borrower had not just sold the securities pledged with bank but dishonestly and fraudulently extended loans and advances to its sister concern/subsidiaries, too. Thereby it has committed misappropriation of funds and put them for personal use.
The bank, in its complaint in October, had mentioned the names of five accused, of which three were guarantors — Khattar Auto India, Carnation Realty and Carnation Insurance Broking. However, during verification no direct role of guarantors in committing the fraud with the bank came to light, and as such they are not named in the FIR. However, their role will be ascertained during investigation.
Refuting all the charges Khattar said, “The company has not indulged in any wrongdoing. A search was conducted by CBI but nothing incriminating was found.” He further said he had invested his life savings in the company. “I understand the bank is following a process. I have always made myself available and will continue to fully cooperate with all the agencies. The claims being made were examined in great detail during the forensic audit and we provided satisfactory replies on each. We were cleared in the forensic audit on each count. I have no doubt we will be vindicated again once the investigation is completed,” he said.
Khattar, a former IAS officer had joined then government-owned Maruti Udyog in 1999. After the merger with Japanese auto major Suzuki, Khattar was retained. He played a significant role in beating tough competition with the foreign firms which were then exploring Indian markets and setting up base. After retirement at the age of 65, he started his multi-brand car sales and services network. Despite getting a private equity back, the business model failed to sustain. In 2017, the PNB dragged the company into insolvency proceedings.
“Carnation was a board managed company with the highest ethical standards and best management practices. Some of the most reputed investors in the country including Premji Invest and Gaja Capital were board members who, in their own interest, kept a tight vigil on its operations and finances. Each financial decision was based on comprehensive business plans and approvals. The company was finally sold to Mahindra Group," Khattar said.
Post its failure as a business, an exhaustive and detailed independent forensic audit at the behest of the bankers under the resolution professional was conducted by a leading independent auditor and nothing was found amiss. Having found no lapses in operations or financial management, the PNB had complained in the matter to CBI as a part of the process followed by them.
In a separate development in the PNB Letter of Undertakings matter, the CBI has filed supplementary chargesheet naming Nirav Modi’s brother Nehal Modi and four others as accused. Sources said that additional charge sheet also mention the role of Cyril Amarchand Mangaldas which had allegedly received about Rs 2 crore from Nirav Modi last year in February.

CBI accuses ex-Maruti MD Jagdish Khattar, his firm of Rs 110-cr bank fraud

The CBIhas booked former Managing Director of Maruti Udyog, Jagdish Khattar, for alleged bank loan fraud of Rs 110 crore by his new company, officials said on Tuesday.
In its FIR filed recently, the CBI has named Khattar and his company Carnation Auto India Limited for allegedly causing a loss of Rs 110 crore to Punjab National Bank, they said.

The CBI has carried out searches at the premises of 77-year old Khattar and Carnation Auto on Monday evening, they said.
Khattar was with Maruti Udyog Limited from 1993 to 2007 when he retired as Managing Director of the company, they said.
After retirement he had launched Carnation for which he got a loan of Rs 170 crore in 2009. The loan was declared non performing asset in 2015 with effect from 2012, the FIR said.
The agency has registered an FIR under IPC sections related to criminal conspiracy and cheating on a complaint from Punjab National Bank, the officials said.
"Carnation is a bonafide business failure. There is no wrong doing. Even an audit was conducted and nothing amiss was found. The bank has referred it to CBI as a part of the process followed by them. Search was conducted by CBI but nothing incriminating was found. We will be vindicated once the investigation is completed.” Khattar told PTI. The CBI has alleged that Khattar and his company dishonestly and fraudulently sold the goods hypothecated to the bank without its permission and diverted the funds thereby causing criminal breach of trust and cheating that caused wrongful loss to the bank and gain to Khattar and his company.
The bank had conducted a forensic audit which showed that fixed assets to the tune of Rs 66.92 crore were sold for a consideration amount of Rs 4.55 crore without its approval, they said.
It is also alleged that sale proceeds were not deposited with the bank and Khattar had dishonestly and fraudulently extended loans and advances to its sister concern/subsidiaries also.
"Thereby it has committed mis-appropriation of bank funds and has put them for own use," the FIR said.
The bank officials allegedly did not do mandatory monthly verification of stock and cross check the debtors/creditors, the FIR said adding role of bank officials will be under scanner.
The bank had mentioned five accused persons in its complaint including three guarantor companies--Khattar Auto India Pvt Ltd, Carnation Realty Pvt Ltd and Carnation Insurance Broking Company Pvt Ltd but their direct role did not surface during the verification exercise.
"However, their role in detail will be ascertained during investigation," the agency said.

INX Media case: CBI files charge sheet against Chidambaram, Karti

The Central Bureau of Investigation (CBI) has named former finance minister P Chidambaram, his son Karti Chidambaram, and 12 others, including bureaucrats, as accused in its prosecution complaint, or charge sheet, filed before a Delhi court on Friday in the INX Media case.
The probe agency has charged Chidambaram and Karti, Congress MP from Tamil Nadu’s Shivaganga constituency, with causing losses to the government and taxpayers by receiving kickbacks from corporates for illegally granting approvals for foreign investments. The charge sheet has been filed under various sections of the Prevention of Corruption Act and the Indian Penal Code.

The Supreme Court, meanwhile, reserved its verdict on Chidambaram's plea against the Delhi High Court order denying him bail in the case.
The CBI said there was a key witness in the case who accused Chidambaram of “attempting intimidation”. It, however, could not ascertain whether the approval granted to INX Media for receiving overseas funds was influenced and compromised.
“He (the unnamed witness) has given his statement under Section 164 of the Code of Criminal Procedure (recorded before a magistrate), saying he is being influenced. His name has been withheld because he was threatened,” said a CBI source. The agency is learnt to have submitted the identity of the witness to court in a sealed cover. The matter will be taken up for hearing on October 21.
Earlier, the CBI was relying upon the statement of accused-turned-approver Indrani Mukherjea. In her statement recorded under the same section, she had said she met the former FM along with husband Peter Mukherjea in 2007. The Mukherjeas are in prison, facing charges in connection with the murder of their daughter.
Indrani was pardoned by the Special CBI court in July after she moved a plea. The CBI too had supported her application after she turned approver in the case. The agency has mentioned the status in the charge sheet.
In its 1,000-plus page prosecution complaint, the CBI also named former NITI Aayog chief executive officer Sindhushree Khullar, former secretary in the Ministry of Micro, Small & Medium Enterprises Anup K Pujari, principal secretary in the Himachal Pradesh government and a retired under-secretary Rabindra Prasad, among others. These officers were then working at the economic affairs department of the finance ministry and allegedly involved in illegally granting Foreign Investment Promotion Board (FIPB) clearance to INX.
Other than these, the agency also named a few companies, including Karti Chidambaram-controlled Advantage Strategic Consulting (ASCL) and Chess Management Services. ASCL and Chess Management allegedly received kickbacks through a complex structure.
The CBI had registered a case in May 2017 to investigate the allegation that INX Media had received foreign investment of Rs 403.07 crore against the approved FDI amount Rs 4.62 crore only. Further, the company illegally invested Rs 40.91 crore in its sister concern INX News from the received FDI amount without approval from the FIPB in violation of provisions of the Foreign Exchange Maintenance Act (FEMA).
During investigation, it was found that Indrani Mukherjea and Peter Mukherjea, directors of INX Media, entered into a criminal conspiracy with the then finance minister Chidambaram and Karti (the then director of Chess Management Services), besides senior officials at the FIPB unit and the DEA, for getting the issue settled without any penal action against them. This caused undue pecuniary advantage to the companies concerned in terms of possible penalty under FEMA, which could have been up to three time the amount involved.
Sources said the CBI in its report has given incriminating documents such as mail trails recovered from the seized hard disk. The agency alleged that the former FM had received several complaints regarding foreign direct investments exceeding limit and was being sent to different agencies. The FIPB was not informed about the complaints received by the former minister.
The charge sheet highlighted that the then revenue secretary, who was also a FIPB member, chose not to attend the meeting of the board where a fresh proposal was to be decided. His representative was in the meeting and gave a dissent note.
Chidambaram, currently in Enforcement Directorate custody, spent 55 days in the CBI and judicial custody.

INX Media case: Court allows ED to quiz Chidambaram, arrest him if required

A special Central Bureau of Investigation (CBI) court on Tuesday allowed the Enforcement Directorate (ED) to go to Tihar jail and interrogate P Chidambaram, and arrest him if required. The former finance minister is currently lodged in Tihar jail in judicial custody of the CBI in a case related to alleged discrepancies in the Foreign Investment Promotion Board approvals for INX Media.
Though the ED wanted to probe Chidambaram in some space available in the Rouse Avenue court itself, the court turned down that plea, saying “it’s not in the dignity of this person that you interrogate and arrest him here in public view”. The court also said ED’s demand to take the former Union minister in remand was also premature as he had not yet been arrested by it.

Earlier in the day, the former Union minister also moved the Supreme Court (SC) seeking bail from his arrest by the CBI. In his plea challenging his arrest by the probe agency, Chidambaram said the CBI wants to keep him in custody to humiliate him. Senior advocates Kapil Sibal and Abhishek Manu Singhvi, who appeared for him in the SC, told the apex court that there are no allegations of financial loss or siphoning of funds.
Challenging the Delhi High Court’s (HC’s) September 30 judgment which denied him bail on the grounds he could possibly influence witnesses, Chidambaram on Tuesday told the apex court that his continued incarceration was in the “form of punishment” and the liberty of an individual could not be denied on the basis of “anonymous and unverified allegations”.
In its order, the HC had also said Chidambaram had been a strong finance minister, and a senior advocate, and “the fact that he will not influence the witnesses directly or indirectly, cannot be ruled out in view of the above facts. Moreover, the investigation is at an advance stage. Therefore, this court is not inclined to grant bail”.
The CBI, on the other hand, had challenged the HC’s observations that Chidambaram was neither a flight risk nor could he possibly tamper with the evidence as “documents relating to the present case were in the custody of the prosecuting agency, the Government of India and the court”.

CBI team scales wall to enter Chidambaram's residence, arrest likely soon

A team of CBI officials descended on the residence of former finance minister P Chidambaram Wednesday night, minutes after he reached there after a dramatic appearance at a press conference at AICC headquarters here.
The team of about 30 CBI sleuths accompanied by Delhi police officials reached the Jor Bagh residence of Chidambaram and knocked on the doors for a few minutes before scaling the boundary wall to enter the premises.

A team of ED officials also reached there.
In fast-paced events, Chidambaram, who could not be traced by the agencies since Tuesday evening and failed to get any relief from the Supreme Court on Wednesday, appeared at the Congress headquarters at 8 pm where he addressed a brief press conference claiming innocence in the INX Media case.
He reached his Jor Bagh residence along with fellow Congress leaders and lawyers Kapil Sibal and Abhishek Manu Singhvi in the same vehicle.
Within minutes of Chidambaram reaching his residence, the CBI sleuths arrived there.
A large number media personnel staked out near the residence.
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#WATCH Delhi: A Central Bureau of Investigation (CBI) official jumps the gate of P Chidambaram's residence to get inside. CBI has issued a Look-Out Notice against him.
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Will extend all necessary help to UK for extradition of Nirav Modi: CBI

The CBI will extend all necessary help to the United Kingdom authorities for extradition of fugitive diamantaire Nirav Modi, wanted in Rs 13,000 crore fraud in Punjab National Bank in collusion with his uncle Mehul Choksi, the agency said Saturday.
The CBI is awaiting a response on its extradition request which was sent to the United Kingdom through the External Affairs Ministry in August last year after the confirmation from London that Modi was in their country, agency spokesperson Nitin Wakankar said.

The United Kingdom has responded to the Red Corner Notice issued by the agency against Modi in June last year, he said.
"We are willing to extend all help to the United Kingdom through External Affairs Ministry in ensuring extradition of Nirav Modi," Wakankar said.
Modi fled the country after allegedly siphoning off about Rs 13,000 crore from Punjab National Bank using Letters of Undertaking in collusion with his uncle Mehul Choski.
Forty-eight-year-old Modi was spotted in a tony neighbourhood of London by British newspaper The Telegraph.
He refused to comment to any of posers put forth by The Telegraph correspondent.
The CBI registered an FIR against him on January 31 on the basis of a complaint against him and his uncle Choksi from the bank. It was followed by another FIR by the agency against him.
Modi's brother and wife were also named as accused in the FIR.
His wife Ami, a US citizen, brother Nishal, a Belgian, and uncle Choksi, Gitanjali Group's promoter, had also fled the country in the first week of January.
The case pertains to allegedly cheating the state-run Punjab National Bank (PNB) through fraudulent issuance of Letters of Undertaking (LoUs) and Foreign Letters of Credit (FLCs).
The agency has charge-sheeted both Nirav Modi and Choksi separately in the scam.
It has now approached the Interpol for a Red Corner Notice aimed at bringing Nirav Modi back for facing trial in the cases against them, the sources said.
The CBI, in its charge sheets filed on May 14, had alleged that Nirav Modi, through his companies, siphoned off funds to the tune of Rs 6,498.20 crore using fraudulent LoUs issued from PNB's Brady House branch in Mumbai.
Choksi allegedly swindled Rs 7,080.86 crore, making it possibly the biggest banking scam in the country, it alleged.
It is alleged that Nirav Modi and Choksi through their companies availed credit from overseas branches of Indian banks using fraudulent guarantees of the PNB given through LoUs and letters of credit which were not repaid bringing the liability on the state-run bank, the officials said.
An LoU is a guarantee given by an issuing bank to Indian banks having branches abroad to grant short-term credit to the applicant.
The instructions for transferring the funds were allegedly issued by a bank employee, Gokulnath Shetty, using an international messaging system for banking, called SWIFT platform, and without making their subsequent entries in the PNB's internal banking software, thus bypassing scrutiny in the bank, they said.

Chit fund scam: CBI starts quizzing Kolkata Police chief Rajeev Kumar

The CBI began questioning the Kolkata Police chief on Saturday at highly secured agency's office here in connection with chit fund scam cases, officials said.
Kolkata Police Commissioner Rajeev Kumar, his counsel Biswajit Deb and senior IPS officers Javed Shamim and Murlidhar Sharma arrived at the probe agency's office at 11 am, they said.

Kumar's counsel and the two IPS officers were asked to leave the CBI office within 30 minutes, they said.
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Kumar is being interrogated at the highly secured CBI office at Oakland area in the Meghalaya capital where three senior CBI sleuths from Delhi reached on Friday.
The Supreme Court on Tuesday had directed the Kolkata Police chief to appear before the CBI and "faithfully" cooperate in the investigation of cases arising out of the Saradha chit fund scam, while making it clear that he will not be arrested.
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The CBI had alleged in the Supreme Court that Kumar, who was leading the SIT probe into Saradha chit fund scam, tampered with the electronic evidence and handed over documents to the agency, some of which were "doctored".
The apex court directed him to appear before the investigating agency at a neutral place in Shillong "to avoid all unnecessary controversy".
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CBI officials had gone to Kumar's residence in Kolkata to question him on January 3 but their attempt was thwarted by the police, following which Chief Minister Mamata Banerjee staged a three-day dharna.

CBI to soon summon Chanda Kochhar, other suspects in ICICI Bank case

Advised by union minister Arun Jaitley to avoid "adventurism", the CBI will start calling suspects in the ICICI Bank case involving its former CEO Chanda Kochhar for questioning after completing scrutiny of documents seized during searches last week, officials said Monday.
The CBI is carrying out scrutiny of the documents seized during searches at the offices of Videocon Group and Nupower Renewables and Supreme Energy, run by Chanda Kochhar's husband Deepak Kochhar, they said.

It is the prerogative of the investigation officer to decide which premises will be searched, the officials said when asked why the residence of Chanda Kochhar, named an accused in the FIR, was not included in the search operation on January 24.
Interim CBI Director M Nageswara Rao had changed the in-charge of the case a day after the filing of the FIR on January 22, and gave the charge of the case to Superintendent of Police Mohit Gupta. Sudhanshu Dhar Mishra, who filed the FIR in the case, was transferred to Ranchi on January 23.
Justifying the transfer, the CBI had pinned the blame on Mishra for keeping the preliminary enquiry pending without any reason and also alleged that his role was suspected in possibly leaking the information about searches, they said.
Immediately after the registration of the case, the searches were proposed to be conducted, they said.
"However, it was suspected that there was a possibility of information regarding searches being leaked. A discreet inquiry was conducted and role of Sudhanshu Dhar Mishra was strongly suspected. Hence he has been transferred pending detailed inquiry in the (serious) matter," an official had said Sunday.
It is alleged that during the tenure of Chanda Kochhar, six loans worth Rs 1,875 crore were cleared for Videocon Group and its associated companies. In two of these cases, she herself was on the sanctioning committees.
In its FIR, the CBI has also named several top honchos of the banking industry, including the present CEO of ICICI Bank, Sandeep Baxi, alleging that they were also members of the sanctioning committees whose role needs investigation.
Banking doyen and Chairman of New Development Bank K V Kamath,Goldman Sachs India chairman Sonjoy Chatterjee, Standard Chartered Bank CEO Zarin Daruwala, Tata Capital head Rajiv Sabharwal and Tata Capital senior advisor Homi Khusrokhan need to be investigated, according to the FIR.
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Their names were included by the agency in the text of the FIR after a year-long preliminary enquiry.
The action attracted strong comments from Jaitley, who advised the agency against "adventurism".
"Sitting thousands of kilometres away, when I read the list of potential targets in the ICICI case, the thought that crossed my mind was again the same - instead of focusing primarily on the target, is a journey to nowhere (or everywhere) being undertaken? If we include the entire who's who of the banking industry with or without evidence what cause are we serving or actually hurting."
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Jaitley is currently undergoing treatment in the US.
Jaitley, who was finance minister of India till last week and had to temporarily hand over the charge to his fellow minister Piyush Goyal for the duration of his indisposition, advised the investigators "Follow the advice of Arjun in the Mahabharat Just concentrate on the bull's eye.

Black Friday for north India's realtors as CBI raids 15 developers

It was a black Friday for north India’s real estate companies as the Central Bureau of Investigation (CBI) raided offices and properties of 15 of the biggest developers in the region.
From JMD, Gupta Promoters Private Ltd, and H S Realty, to major ones including Ansal Properties, Emaar MGF, and DLF — all had their offices raided by CBI sleuths in simultaneous raids.
The CBI booked former Haryana chief minister and Congress leader Bhupinder Singh Hooda on cheating and corruption charges in connection with land acquisition in Gurugram that favoured private builders. It conducted searches at 20 locations including his Rohtak residence.
The CBI named in the FIR Haryana Additional Chief Secretary Haryana Trilok Chand Gupta, who was then chief administrator, Haryana Urban Development Authority (HUDA). The searches were carried out in Delhi and Gurugram.
Stock prices tank, other developers run for cover
DLF, the country’s largest real estate developer, was the worst-hit as its shares ended 11.5 per cent lower, losing Rs 3,600 crore in market capitalisation, after the CBI raided the company's office in Gurugram in connection with a case of alleged irregularities in allocating land to the firm. The shares of Ansal Properties and Infrastructure Ltd fell 5.6 per cent.
“A CBI team visited our offices today as well as those of several other corporates, with respect to an old case, pertaining to a land acquisition matter. We are confident of the merits of our case and are extending our full cooperation to the authorities,” DLF’s spokesperson said.
Black Friday for north India's realtors as CBI raids 15 developers Other builders booked by the CBI included R S Infrastructure, Martial Buildcon, Marconi Infratech, Commander Realtors, SU Estates Pvt Ltd, Krrish Buildtech, JMD, Gupta Promoters, H S Realty, DSS Infrastructure, and Sana Realtors.
Officials at the CBI said investigation was on and files from all these offices pertaining to land deals had been collected.
CBI’s allegations

According to CBI spokesperson Nitin Wakankar, this is the third case against Hooda and others and was registered on the directions of the Supreme Court on November 1, 2017, when the CBI was entrusted with the probe into alleged irregularities in acquiring 1,417.07 acres (one acre=43,560 square feet) between 2009 and 2012 for Sectors 58 to 63 and 65 to 67 in Gurugram.
The government had issued the notification on June 2, 2009, he said. Hooda was chief minister at that time. Subsequently, another notification was issued for acquiring 850.10 acres on May 31, 2010, officials said.
The CBI alleged during the notification period approximately 616.40 acres was released in favour of developers. “It emerged during the preliminary enquiry that the objective of HUDA in acquiring the land to ensure the availability of developed land at affordable prices to the public at large and to the economically weaker sections of society has not been achieved,” the CBI has alleged.

Govt curtails Rakesh Asthana, three other officers' tenure in CBI

The Centre on Thursday curtailed the tenures of Special Director Rakesh Asthana and three more senior officers in the CBI with immediate effect, days after the agency's chief Alok Verma was shunted out by the Prime Minister Narendra Modi-led panel.
Gujarat-cadre IPS officer Asthana, who had an unprecedented feud with his boss Verma, was sent on forced leave by the government in October last year.

The tenures of Asthana, Joint Director Arun Kumar Sharma, Deputy Inspector General Manish Kumar Sinha and Superintendent of Police Jayant J Naiknavare have been curtailed, the Personnel Ministry said in an order.
Verma and Asthana had levelled allegations of corruption against each other. They were sent on forced leave by the government.
Amidst the feud between the two, the CBI registered a corruption case against Asthana when Verma was the agency's chief.
Meanwhile, the government appointed M Nageshwara Rao as the interim CBI chief.
Rao had then transferred Sinha, who was probing the FIR against Asthana, to Nagpur from the agency's Delhi headquarters.
His transfer was, however, reversed by Verma who was again in January given the charge of the CBI Director following a decision by the Supreme Court.
Verma was shunted out as the CBI chief by the Modi-led high-powered committee that comprised Supreme Court judge A K Sikri and Congress leader Mallikarjun Kharge as the members.
Verma was then appointed as the Director General of Fire Services, Civil Defence and Home Guards. He, however, refused to take up the new post, saying he had already superannuated from the Indian Police Service after completing 60 years of age on July 31, 2017.
Verma took over as the CBI chief for a fixed two-year term on February 1, 2017.
The tenure of Sinha, whose name had also come up in the CBI controversy involving its two top officers, was also curtailed.
Sinha, in a petition filed before Supreme Court against his transfer, dragged the names of National Security Adviser (NSA) Ajit Doval, Union Minister Haribhai Parthibhai Chaudhary and Central Vigilance Commissioner K V Chowdary over alleged attempts to interfere in the probe against Asthana.
Sharma, who is considered close to Verma, was also involved in the bitter quarrel between Verma and the sacked CBI chief.
Asthana and Sharma are Gujarat-cadre IPS officers. Whereas, Sinha is a 2000-batch IPS officer of Andhra Pradesh cadre and Naiknavare belongs to 2004-batch Maharashtra cadre.

Alok Verma removed as CBI chief by PM Modi-led selection committee

A committee led by Prime Minister Narendra Modi on Thursday removed Alok Verma as CBI Director, two days after the Supreme Court scrapped a government order and reinstated him.
The committee, which also included Mallikarjun Kharge, the Congress party’s leader in the Lok Sabha, and Supreme Court Justice A K Sikri, removed Verma after considering the Central Vigilance Commission’s (CVC) investigation of corruption charges against the officer.
Verma was removed on charges of corruption and dereliction of duty, news agency PTI reported quoting unnamed officials. The Congress said Verma's removal proved Modi was "too afraid" of the allegations the party had made against his government.
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The Supreme Court on Tuesday reinstated Verma as the agency chief, setting aside the CVC and the Centre's October 23 decision to divest him of his powers to function as its head but with a caveat that he will not take any policy decision till a high-level committee goes into the issue afresh.
Verma will retire at the end of this month.

Alok Verma is back as CBI director as Supreme Court scraps govt order

The Supreme Court on Tuesday reinstated Alok Kumar Verma as director of the Central Bureau of Investigation (CBI), but restrained him from taking any major policy decision till a probe against him for alleged corruption is over.
It set aside the government's decision to appoint senior IPS officer M Nageswara Rao as the agency's interim chief. The court did not address the case of the CBI's second-in-command, Rakesh Asthana.

The court said a committee, which appoints the CBI director and comprises the prime minister, the leader of opposition and the chief justice of India, should be convened within a week to study the Central Vigilance Commission's (CVC) probe against Verma.
Welcoming the ruling, the opposition Congress Party said the court had "lambasted" the government's decision to place Verma on leave. "The CBI chief was ousted at 1 am in the night because he was about to begin a probe into the Rafale deal. The CBI chief has been reinstated and we have got some relief. Now let's see what happens," said Congress President Rahul Gandhi, referring to India's agreement with France to buy Rafale fighter jets.
Finance Minister Arun Jaitley defended the government's decision to remove Verma and Asthana, but told reporters that it would comply with the court's ruling. "This action taken was perfectly bonafide as there were cross-allegations made by both the officers, and in accordance with recommendations of the CVC. The government felt that in the larger interest of fair and impartial investigation and credibility of CBI, the two officers must recuse themselves," he said.
Verma's two-year tenure as CBI chief ends on January 31. The Centre had removed him and Asthana on October 23, saying that they were exposing the CBI to "public ridicule" by fighting like "Kilkenny cats".
The CBI is currently investigating several high profile cases, including a $2 billion fraud at Punjab National Bank involving fugitive diamond billionaire Nirav Modi and loan defaults by liquor baron Vijay Mallya.

SC verdict on CBI Director Alok Verma's plea against his removal on Tuesday

The Supreme Court is scheduled to pronounce on Tuesday its verdict on CBI Director Alok Kumar Verma's plea against the Centre's decision to divest him of powers and sending him on leave.
The Centre had taken a decision against Verma and CBI's Special Director Rakesh Asthana after their feud become public as they made allegations of corruption against each other.
Verma has sought quashing of three orders of October 23, 2018 -- one by the Central Vigilance Commission (CVC) and two by the Department of Personnel and Training (DoPT), as being without jurisdiction and in violation of Articles 14, 19 and 21 of the Constitution.

CBI's Joint Director M Nageswara Rao, a 1986 batch Odisha-cadre IPS officer, was given the charge of interim chief of the probe agency.
A bench headed by Chief Justice Ranjan Gogoi had on December 6 reserved the judgement after hearing arguments on behalf of Verma, the Centre, the CVC and others.
The court had also heard the plea moved by NGO Common Cause which had sought a court-monitored SIT probe into the allegations of corruption against various CBI officials, including Asthana.
Verma's two-year tenure as CBI director ends on January 31.
He has moved the top court challenging the Centre's decision.
The Centre had justified its decision to divest Verma of his duties and sending him on leave before the apex court saying he and Asthana were fighting like "Kilkenny cats", exposing the country's premier investigating agency to "public ridicule".
Attorney General K K Venugopal had told the bench, also comprising Justices S K Kaul and K M Joseph, that the Centre was well "within its right to intervene" and send both officers on leave by divesting them of their powers.
Venugopal had told the court that "only the God knows where and how this fight between the two top officers would have ended" if the government would not have taken the action which was aimed at restoring the public faith in the CBI.
Challenging the government's decision, Verma's counsel and senior advocate Fali S Nariman had argued that the CBI Director was appointed on February 1, 2017 and "the position of law is that there will be a fixed tenure of two years and this gentleman cannot be even transferred".
Nariman had said there was no basis for the CVC to pass an order recommending that Verma be sent on leave.

CBI vs CBI: SC orders CVC to complete Alok Verma probe in two weeks

The Supreme Court on Friday said it would supervise the inquiry against CBI Director Alok Verma and the probe should conclude in two weeks. It also appointed former Supreme Court judge Justice A K Patnaik to monitor the investigation.
The matter will be heard again on November 12.
The Bench, presided over by Chief Justice of India Ranjan Gogoi, stated that M Nageswar Rao, who has been put in temporary charge in place of Verma, would not take any major policy decision. He will take decisions only on routine matters essential to keep the agency functioning.
A list of decisions taken from October 23 till Friday will be submitted to the court in a sealed cover. This will include decisions on transfers of investigating officers and related matters.
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Though the courtroom of Chief Justice of India Ranjan Gogoi was unusually crowded with an anxious gathering of lawyers and activists, the judges succeeded in easing the tension with a few light-hearted remarks.
When the three judges conferred at length with each other in whispers, counsel was curious to know what they were discussing. The Chief Justice told him it was not about the Alok Verma case. “We discuss so many other things too,” he remarked.
When Solicitor General Tushar Mehta pleaded for more than 10 days to complete the enquiry ordered by the court, the chief justice said “then we will give you 240 hours”. When Mehta again requested more time, pointing out that the records went through hundreds of pages, the judge said, “We go through thousands of pages.”

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The next appeal was on the basis of the approaching Diwali holidays. Again the judge responded: “Doesn’t the CBI work on holidays?”
The law officer then appeared to have exhausted his quiver.
A CBI spokesperson said the agency would follow the court directions in letter and spirit and, if necessary, seek legal opinion on what decisions could be taken in the interim.
Sources in the CBI, though, said this might hamper the investigation of several high-profile cases.
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“Work will now be basically file movements from one desk to another as both the government and the agency would not like to antagonise the court,” an official said. The agency is investigating fugitive industrialist Vijay Mallya; AugustaWestland; the IRCTC case, in which Rashtriya Janata Dal chief Lalu Prasad and his family members are named; and the Aircel-Maxis case, in which former Union minister P Chidambaram’s son Karti is an accused. Verma had moved the Supreme Court, challenging the Centre’s decision to divest him of his responsibilities. In his petition Verma had said the government had violated the rules, which gave a fixed tenure to the CBI director.
The unprecedented situation became further complex as several officials investigating sensitive cases including bribery allegations against special director Rakesh Asthana were transferred.
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Asthana too on Friday moved the Supreme Court but when former attorney general Mukul Rohatgi, representing Asthana, tried to intervene, the court refused to hear the petition, saying it was not listed.
After receiving all the reports, the court will pass “appropriate orders”, it stated. The present order is an interim arrangement till the next hearing on November 12.
The judges made it clear that this order on supervision by a retired judge was a one-time exception. It did not cast any aspersion on the functioning of the Central Vigilance Commission (CVC).
“The court has virtually disabled the new CBI director,” said lawyer Prashant Bhushan, who filed a plea under the banner of NGO Common Cause, opposing the decision to divest Verma of his powers.
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The Bench, which also included Justice Sanjay Kishan Kaul and Justice M K Joseph, heard leading counsel F S Nariman, who represented Verma for a short while. Counsel argued that the CBI director had been granted a two-year term in the Supreme Court judgment in the Vineet Narain case (“hawala case) of the 1990s. This rule was later incorporated in the CVC Act in 2003 and the Delhi Police Establishment Act, which deals with the CBI’s powers.
MAKING OF THE CRISIS
Oct 15: CBI files an FIR against Special Director Rakesh Asthana
Oct 19: Asthana writes to CVC, levelling bribery charges against CBI Director Alok Verma
Oct 22: CBI arrests its own officer Devender Kumar for alleged falsification of records, raids offices of Asthana and Kumar
Oct 23: Asthana moves Delhi HC, seeking quashing of the FIR
Oct 24: Govt sends both Verma and Asthana on leave, appoints M Nageshwar Rao interim CBI chief Verma moves SC, challenging his removal

PNB scam: Ex-MD Ananthasubramanian, named in CBI chargesheet, gets bail

A special CBI court in Mumbai granted bail on Monday to Usha Ananthasubramanian, former managing director and CEO of Allahabad bank, in connection with the Rs 140-billion fraud at the Punjab National Bank (PNB).
Earlier this month, the court had taken cognisance of the sanction granted by the President to prosecute Ananthasubramanian in the case.
As per the procedure, when a court takes cognisance of the sanction, summons are issued to the accused to appear before the court.
Thereafter, the accused can move a bail application.
Accordingly, Ananthasubramanian appeared before special judge J C Jagdale and applied for bail, which was granted by the court.
The government had dismissed Ananathasubramanian on August 14.
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Three months ago, she was divested of her powers as MD and CEO of the Allahabad Bank following the country's biggest bank fraud allegedly carried out by diamond jeweller Nirav Modi and associates at the PNB.
Ananathasubramanian, who was the MD and CEO of the Punjab National Bank before moving to the Allahabad Bank, was named in the CBI charge sheet in connection with the Rs 140-billion fraud through fake LoUs in connivance with some PNB employees.
It was alleged that she failed to exercise proper control over the functioning of the PNB while serving as the bank's managing director.
It enabled the fraud in the bank through misuse of SWIFT (Society for Worldwide Interbank Financial Telecommunications), an international payment gateway for large transactions, at PNB's Brady House branch.
Ananthasubramanian had enjoyed leadership roles in the PNB in two stints. She headed the bank between August 2015 and May 2017, before moving to the Allahabad Bank. She was executive director at the bank from July 2011 to November 2013.

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Nirav Modi and his uncle Mehul Choksi, in connivance with certain bank officials, allegedly cheated PNB of about Rs 140 billion through issuance of fraudulent letters of undertaking (LoUs).
The Mumbai branch of the PNB had fraudulently issued LoUs for the group of companies belonging to Modi since March 2011.
The total number of LoUs issued to the companies of Nirav Modi, his relatives and the Nirav Modi Group were 1,213, and to Mehul Choksi, his relatives and the Gitanjali Group were 377.
Besides Anathasubramanian, the CBI court had also taken cognisance of sanction for prosecution against former PNB executive director Sanjiv Sharan. He, too, was granted bail on Monday on similar ground.

CBI writes to Antigua for whereabouts of PNB fraud-accused Mehul Choksi

The CBI has written to Antiguan authorities seeking whereabouts of fugitive diamantaire Mehul Choksi, allegedly involved in over $2 billion scam in state-run Punjab National Bank, government sources said.
The move comes after it emerged that Choksi had moved to the Caribbean country in July and also taken a local passport.

The CBI in its communication sent to Antiguan authority last evening cited diffusion notice issued by the Interpol against the fugitive businessman and sought details of his movement and his present location, the source said.
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Choksi had taken citizenship of Antigua in November 2017, and oath of allegiance on January 15 this year, according to a local newspaper Antigua Observer.
Citing reports from Indian outlets, the newspaper sent a questionnaire to Citizenship by Investment unit of Antigua about Choksi.
It was informed that Choksi's application was granted after "robust due diligence" and "international investigation" by "reputable agencies", including the International Criminal Police Organization and the CARICOM Implementing Agency for Crime and Security (IMPACS), the paper reported today.
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Choksi's actions show that he had planned in advance his escape and subsequent life knowing that the scam would blow up after the retirement of PNB employee Gokulnath Shetty who was helping him with renewals of Letter of Undertakings, the source said.

CBI seeks support from tax experts to probe multi-billion banking frauds

The Central Bureau of Investigation (CBI), which is probing the over Rs 130 billion Punjab National Bank scam as well as other financial frauds, has sought deputation of banking and tax experts from various ministries with an offer of good monetary incentives.
According to an official communique sent by the CBI to finance and other key ministries, the agency has asked for officers on deputation as advisor (banking), senior advisor (foreign trade or foreign exchange), deputy advisor (foreign trade or foreign exchange) and senior advisor (taxation) on deputation.

Those selected will initially be given short-term contract with the premier investigation agency, it said.
These posts are to provide technical assistance and expertise in probing cases involving banking, foreign trade and foreign exchange, taxation and to supervise the work of other technical officer working in the agency, the letter routed to various ministries said.
"It may be noted that the officers coming on deputation to CBI are entitled for a special security allowance at the rate of 20 per cent on the pay," it said.
The communique, however, said the candidates who apply for the post will not be allowed to withdraw their candidature subsequently.
The CBI is looking into various big-ticket fraud cases in banks besides other complex cases related to foreign trade and taxation.
Among the prominent ones is the over Rs 130 billion fraud in the PNB allegedly committed by jeweller Nirav Modi and his uncle Mehul Choksi, the promoter of Gitanjali Gems.
The CBI had some time back also booked top officials of two public sector banks, a former CMD of the IDBI Bank, former Aircel promoter C Sivasankaran, his son and companies controlled by him in connection with a Rs 6 billion loan fraud in the IDBI.
The CBI had on Friday arrested two senior retired officers of the Bank of India in connection with alleged loan fraud of Rs 26.54 billion by Vadodara-based Diamond Power Infrastructure Ltd. (DPIL) in the bank.
Some former top RBI officials are also under the scanner of the CBI for alleged financial frauds.
The induction of financial expert in the agency will help in expediting probe in financial crime cases, they said.
During 2017, the CBI had registered 939 regular cases and 137 preliminary enquiries. As many as 9,383 cases were pending in various courts at the end of the year.

CBI examines rationale for RBI issuing 20:80 gold import scheme in 'haste'

The Central Bureau of Investigation (CBI) is examining the rationale for the Reserve Bank of India (RBI) issuing the 20:80 gold import scheme circular “in haste” on May 21, 2014.
CBI officials, who questioned former RBI deputy governor H R Khan on Friday, wanted to understand from him why the gold scheme (that allowed private players to import gold) was rushed through without taking into the account the impact and potential misuse. Khan was in charge of the central bank’s foreign exchange department for five years till 2016.

The questioning, sources familiar with the developments said, was in connection with the Rs 130-billion scam at Punjab National Bank (PNB) involving jewellers Nirav Modi and Mehul Choksi. The relaxation of the gold import rules in 2014 by the erstwhile United Progressive Alliance (UPA) government, allegedly helped Choksi’s company and others make windfall gains to the tune of Rs 45 billion.
According to the sources, the central agency is of the view that before issuing the circular, proper due diligence procedures were not followed. Typically, such a circular needs to be approved and signed by the RBI’s chief general manager and executive director before issuance.
However, in response to Business Standard’s query, Khan said, “The circular was signed by the chief general manager and it is there on the website of the RBI.”
“The government’s instructions on export/import matter received via fax was acted upon accordingly. The matter was deliberated internally for quite some time and the decision was not taken in haste,” he added.
H R Khan He said due process was followed. According to him, “In the RBI, urgent advices are not kept pending if one or two officials are on leave or on tour.”
Khan is the senior-most former official of the RBI to be questioned in the PNB matter, considered the biggest fraud in the financial history of the country. The CBI has also interrogated three chief general managers and one general manager of the RBI.
The questioning of Khan is said to have begun with the aim of understanding the policy framework of the time when fraudulent letters of undertaking (LoUs) were issued by PNB to the firms of Modi and Choksi, according to sources.
“We are examining all the aspects related to the LoU scam. The probe, also looking into the 20:80 scheme, suggests that it has benefitted a handful of trading houses in a window of just six months,” said a CBI official.
Khan would be called again if required and a few more officials of the central bank would be also asked to join the probe, he said.
The CBI would also soon write to finance ministry to seek clarifications on the decision, which was cleared by former finance minister P Chidambaram on May 13, 2014.
The CBI probe into the gold scheme was followed by the government’s statement that the agency would take action against people who relaxed gold import rules for star and premier trading houses.
The government also alleged that UPA government’s 20:80 scheme resulted in a windfall of Rs 45 billion to 13 trading houses in six months. The government referred to the Comptroller and Auditor General (CAG) report on gold imports, which showed that about 287 tonnes were imported by 13 trading houses between June and November 2014. The CAG has also taken into account a premium of Rs 0.2 million per kilogram and 80 per cent of imported gold supplied to domestic market earning the premium.
The 20:80 scheme had mandated that for every 100 tonnes of gold imported into the country, at least 20 tonnes were to be exported.
The scheme, which was designed to encourage exports, had witnessed fraud as jewellers were exporting plain jewellery which were melted overseas through shell firms for the purpose of re-import.
In 2014, Chidambaram had modified the gold import scheme and allowed private trading houses to import gold provided they exported 20 per cent of it in the form of gold jewellery.
Earlier, only state-run firms were allowed to import gold. The scheme benefitted trading houses whose imports shot up by 320 per cent during that period.

CBI preliminary enquiry against Deepak Kochhar, Videocon's Dhoot: Reports

The Central Bureau of Investigation (CBI) has registered a preliminary enquiry (PE) against ICICI Bank CEO Chanda Kochhar's husband Deepak Kochhar in connection with Videocon loan row, sources said on Saturday.
Chanda Kochhar, her husband Deepak Kochhar, and Venugopal Dhoot, the promoter of Videocon Group are caught up in a controversy over ICICI allegedly granting loan worth Rs 32.50 billion to Videocon, of which the unpaid Rs 28.10 billion were declared NPA in 2017.

The role of Deepak Kochhar in the case dates back to December 2008, when he set up a joint venture with Dhoot, NuPower Renewables Pvt Ltd (NRPL) with 50-50 shares owned by both and their associates.
In 2009, Dhoot resigned as NRPL director and transferred around 25,000 shares of his to Deepak Kochhar, and a year later his company Supreme Energy Private Limited allegedly gave loan of Rs 640 mllion to Deepak Kochhar's NRPL.
In what followed a timeline of share transfer between the two, Dhoot's Supreme Energy took over majority of the shares of NRPL which he transferred to his associate Mahesh Chandra Punglia.
Punglia in turn transferred his entire stake in Supreme Energy to Deepak Kochhar's Pinnacle Energy for only Rs 900,000, just six months after the Videocon Group got a loan of Rs 32.50 billion from ICICI Bank.
This has raised a question of conflict of interest, on part of Chanda Kochhar.
Soon after the reports came, the RBI imposed monetary penalty worth Rs 589 billion on ICICI, for failing to abide by rules on the sale of bonds in the held-to-maturity (HTM) category.

CBI arrests PNB Brady House branch's internal auditor in $2-billion fraud

The Central Bureau of Investigation (CBI) on Wednesday arrested an internal auditor of a Punjab National Bank branch that is at the heart of a $2 billion alleged fraud, a police spokesman said.

The arrested auditor M K Sharma was "allegedly responsible for auditing the systems and practices" of the bank's Brady House branch in Mumbai and report deficiencies to zonal audit office, the spokesman said.
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Sharma will be produced in a Mumbai court on Thursday.