While probing Sushen Mohan Gupta, accused in the VVIP AgustaWestland chopper scam, the Enforcement Directorate (ED) on Monday, made a critical observation on the crippling impunity when it comes to Indian businessmen facing charges.
Rejecting his plea for bail, the probe agency said there is a likelihood that the Gupta, alleged defence agent in the UPA-era scam, would flee the country like 36 other businessmen have in the recent past, despite having registered criminal cases against them.
In response to Gupta’s argument that he will not abscond as he has “deep roots in society”, the ED’s special public prosecutors DP Singh and NK Matta countered citing the examples of Vijay Mallya, Lati Modi, Nirav Modi and Mehul Choksi who had “deeper roots in society” and yet they left the country.
Bail denied to account for precedents
This is when the ED also reminded special judge Arvind Kumar that 36 businessmen, including Vijay Mallya and Nirav Modi, have seized this window of opportunity to leave the country in the recent past, after defaulting on loans worth millions.
While the former liquor baron is fighting tooth and nail to avoid deportation from the UK, the fugitive diamantaire was detained by the British law enforcement authorities last month. Modi is wanted by ED on money-laundering charges and by CBI for criminal corruption charges in connection with the $2 billion alleged fraud at Punjab National Bank in the largest banking scam of the country.
But it has remained extremely difficult to extradite them so as to be able to try them in an Indian court, ever since.
“There are such 36 businessmen who fled from the country in the last few years,” the probe agency told the Special CBI Judge according to PTI reports, mentioning Mallya, Modi, Choksi and the Sandesara brothers (Sterling Biotech Ltd promoters) in their deposition.
Last year, the Ministry of External Affairs had released a list of 31 individuals who had fled the country under similar pretext, designating them as fugitive economic offenders. In January, minister of state for finance Shiv Pratap Shukla told the Lok Sabha that 27 people who were facing charges for economic offences and loan default had fled the country in the last five years alone.
Later in March, the Centre identified 91 people who were at flight-risk with most facing inquiry and investigation by the ED and/or CBI. Including heads and owners of companies, this list comprised names of people who will not be allowed to leave the country.
How is Gupta implicated?
While Gupta claimed he was entitled to bail as the agency has already completed the investigation and filed a chargesheet in the case, counsel for the ED, advocate Samvedna Verma, reminded the judge that the probe into Gupta’s connections with the AgustaWestland scam was at a crucial stage.
Verma further accused Gupta of influencing witnesses in the case and told the judge that he also tried to destroy evidence; the agency has also been trying to find out the identity of “RG” referred in Gupta’s diaries.
In his defence, however, Gupta claimed he had cooperated with the investigation as and when summoned, so the ED’s contention of flight risk can be rejected.
The court has reserved the order on Gupta’s bail application until April 20. He was arrested by the agency under the Prevention of Money Laundering Act after his role in the Choppergate scam came to light on the basis of disclosures made by Rajiv Saxena.
Saxena was arrested by the agency after he was deported from the UAE, following which he has turned approver in the case. It is suspected that Gupta has with him some payment details in the Rs. 3,600 crore deal of AgustaWestland VVIP choppers which needs to be unravelled, the investigators said.
What is the AgustaWestland scam?
Five years after the Rs 3,600-crore scandal, alleged middleman Christian James Michel was also extradited to India from Dubai late last year, but he has offered up fewer details on the case that is touted as the biggest scam since Bofors.
Michel, a 57-year-old British national, was an established arms dealer who allegedly helped Italian-owned British subsidiary AgustaWestland to clinch the 2010 deal with then Congress-led UPA government, for 12 AW101 choppers meant for VVIP use. The scam came to light in 2013 when the then-defence minister AK Antony accepted the fact that bribes were taken.
Michel was charge-sheeted in June 2016 for receiving 30 million euros (Rs 225 crore) to bribe Indian bureaucrats, politicians and Indian Air Force officials. According to his diaries now in possession of the CBI, Michel paid six million euros to Indian Air Force (IAF) officers, 8.4 million to bureaucrats in addition to 15-16 million to an unidentified political family.
The chargesheet included two other middlemen Guido Haschke and Carlo Gerosa. The former seems to have written a note addressed to Michel, which named the Gandhi family, Sonia Gandhi’s personal aide, Pranab Mukherjee and several other Indian politicians.
UPA chairperson Sonia Gandhi’s name was dragged into the deal when a Milan court mentioned conversations between the three middlemen mentioning a ‘Mrs. Gandhi’.
The FIR also named four companies – Italy-based Finmeccanica, UK-based AgustaWestland and Chandigarh-based IDS Infotech and Aeromatrix, besides Tyagi, Satish Bagrodia (the brother of former Union minister Santosh Bagrodia) and Pratap Aggarwal (chairman and managing director of IDS Infotech).
Other senior officials involved in the decision-making process that led to the selection of the AgustaWestland helicopters for VIP use were MK Narayanan (Indian Police Service (IPS), former Director Intelligence Bureau (India) and NSA); BV Wanchoo (IPS, and Chief of Special Protection Group); and Shashi Kant Sharma, IAS, and former defence secretary. Billionaire arms dealer Abhishek Verma is also believed to be responsible for getting the CSS clearance from the Cabinet committee.
Why this matters
This is not the first time the Centre has publicly acknowledged how a large number of rich Indians facing criminal charges have managed to dodge investigation by leaving the country. From London to St. Kitts, India has been struggling to extradite businessmen it claims have fled the country after defaulting on billions of dollars of bank loans. But a pervasive culture of impunity is being normalised and disturbingly so, without comprehensive action being taken to prevent offenders from fleeing the coup.
Public anger against the government mounted especially after two prominent jewellers, Modi and Choksi, left the country just before their alleged involvement in the nation’s biggest bank fraud came to light.
Although Shukla said that Interpol has been asked to issue red-corner notices against 20 offenders, Nirav Modi was spotted in London going about his business as usual, while his uncle and partner in the PNB scam, Mehul Choksi, has received asylum in Antigua and Barbuda.
Less than a month after first details of the PNB scam emerged, lawmakers introduced a bill that will give authorities power to impound the assets of fugitive offenders — people who have fled the country after committing an economic offence involving 1 billion rupees or more.
The government has also reportedly transferred the ED’s special director in Mumbai, Vineet Agarwal, for his alleged interference in relieving the agency’s investigating officer in the Nirav Modi money-laundering case without following due procedure, officials said Tuesday.
Impact on economy
India’s regulator has stepped up efforts to clean up $210 billion of bad loans in the banking system, partly by tightening bankruptcy rules. According to a recent report compiled by the RBI, non-performing assets (NPAs) under the NDA government have also soared to Rs 10.39 lakh crore in the last five years.
The latest figures on NPAs in the banking sector have seen a significant jump, from Rs 7.9 lakh crore in 2016-17 due to major frauds like the PNB scam unearthed in early 2018. Bad assets have increased fourfold since 2014; ironically enough, this issue has completely disappeared from the BJP’s poll narrative, despite occupying central importance before the 2014 polls.
With the 39-day general elections currently underway, the ED’s latest admission stands to be a major poll issue, as common taxpayers are tired of the rich and the powerful getting away with financial crimes.
The general attitude of condonation and leniency has cast further doubt on the efficacy of the nation’s self-proclaimed chowkidaars, especially with reports of the ruling government’s complicity in the new smoking gun — the Rafale fighter jet controversy.
Prarthana Mitra is a Staff Writer at Qrius