May 19, 2021 10:27:47 pm
The Central Bureau of Investigation has booked US Awasthi, the CEO and MD of Indian Farmers Fertilizer Co-operative (IFFCO) Ltd, his two sons, and seven others for alleged corruption and causing loss to the exchequer by importing fertilizer raw material at inflated prices.
The agency Wednesday conducted searches at 12 locations—including Awasthi’s office and residence—in Delhi, Gurugram and Mumbai, among other places.
According to CBI, IFFCO and another firm, Indian Potash Ltd, have been importing thousands of metric tonnes of fertilizers and fertilizer raw materials from multiple foreign suppliers. The fertilizers, subsidised by the Centre, are supplied to farmers.
“In order to cheat Govt. of India by claiming higher subsidy, these officials of IFFCO and Indian Potash Limited have been importing fertilizers and raw materials through M/s. Kisan International Trading FZE in Dubai (a subsidiary of IFFCO) and other middlemen at highly inflated rates covering the commission meant for the accused including then MD of IFFCO & then MD of Indian Potash Ltd, which was paid / transferred by the Overseas Suppliers to the accused officials through sham transactions involving the said accused,” the CBI said in a statement.
The CBI case is based on references received from the Ministry of Chemicals and Fertilizers, apart from information developed by it.
Apart from Awasthi, those named in the FIR include Pravinder Singh Gahlaut, then MD, Indian Potash Ltd. (IPL); Amol Awasthi (son of US Awasthi), Promoter of M/s Catalyst Business Associates Pvt Ltd; Anupam Awasthi (son of US Awasthi), Promoter of M/s Catalyst Business Solutions Pvt Ltd.; Vivek Gahlaut (son of Pravinder Singh Gahlaut); Pankaj Jain, Jyoti Group of Companies and Rare Earth Group, Dubai; Sanjay Jain (brother of Pankaj Jain), President of M/s. Jyoti Trading Corporation and beneficial owner of other entities of Jyoti Group; Amrinder Dhari Singh, Sr. Vice President of M/s. Jyoti Trading Corporation, Dubai; Rajiv Saxena, Chartered Accountant and Promoter of Midas Metal International LLC and certain other companies; and Sushil Kumar Pachisia, an employee of Pankaj Jain.
The CBI said it had found Rs 8.80 lakh cash at Awasthi’s premises. The agency also found documents related to FDR of over Rs 5.5 crore in the name of Parvinder Singh Gahlaut and his family members from his residence. Apart from this, details of 14 bank accounts and documents related to 19 immovable properties in Mumbai, Himachal Pradesh, Gurugram, Delhi and Sonipat were also found.
In October last year, the Enforcement Directorate (ED) too had booked Awasthi and raided his offices in connection with a Foreign Exchange Management Act (FEMA) violation case.
IFFCO has been under the scanner of central agencies since 2011 when its then chairman Surinder Jakhar died in mysterious circumstances at a farmhouse with his body riddled with bullets and police claiming it to be a case of accidental firing. Jakhar was the son of Congress leader Balram Jakhar.
A reference sent to CBI and ED by the Central Vigilance Commission (CVC) then had alleged irregularities in the procurement of raw material for fertiliser from certain foreign countries. Awasthi was then the MD of IFFCO and continues to hold the post.
In 2018, the government had informed Lok Sabha that it had asked CBI to probe IFFCO and Awasthi for various irregularities. The latter was also to be probed for alleged money laundering, the government had said.
The Indian Express had on October 10 last year reported that IFFCO’s transactions with three companies based in Dubai, Switzerland and Singapore, were red-flagged by Deutsche Bank Trust Company Americas (DBTCA) to the US financial watchdog, Financial Crimes Enforcement Network (FinCEN).
In July 2014, a suspicious activity report (SAR) filed by DBTCA flagged 14 transactions of IFFCO involving transfers and remittances worth $18.46 million. The SAR cited “negative information found on the MD and CEO of Indian Farmers Fertiliser Cooperative Limited for potential money laundering.”
On August 7, 2018, the government had told Lok Sabha that CBI had been asked to probe complaints—received between 2013 and 2017—related to the cases of corruption and irregularities against IFFCO officials, including its MD U S Awasthi and his family members.
“Department of Fertilisers has referred various complaints pertaining to corruption and irregularities in IFFCO to CBI for enquiry/reports and the same are awaited,” then Minister of State for Fertilisers Rao Inderjit Singh had said in a written reply to the Lok Sabha.
The cases, which the fertilizer ministry had asked CBI to probe, are related to alleged money laundering by the IFFCO managing director, his sons, relatives and friends associated with the cooperative, Inderjit had said.
They also relate to alleged grabbing of the guest house and posh bungalow by Awasthi illegally and unlawfully, subsidy fraud by opening Kisan International Trading, earning a huge illegal commission in imports of raw materials and finished fertilisers thereby creating huge loss to the society, the minister had added.
The minister had further mentioned that the cases to be probed also include an alleged “illegal extension of Awasthi’s term of superannuation beyond the age of 65 years, increasing his remuneration and other functional directors, seeking favours from political parties by extending donations in a camouflaged way in violation of Multi State Cooperative Societies Act (MSCS), 2002”.
The cases are also related to alleged defrauding the government by manipulating sales and claiming higher subsidy, illegally inducting kith and kin on suitable posts in IFFCO by Awasthi and misusing resources and facility of the cooperative, he had added.
Besides, the cases are also related to alleged gross mismanagement of funds along with siphoning off money and fabricating balance sheet by IFFCO, wrong disclosures in violation of established accounting practices and misleading the stakeholders, especially the banks, by IFFCO.
The complaints also include manipulation of the Multi-State Cooperative Societies Act, further manipulating bylaws of society and illegal repatriation of the government equity by the IFFCO Board, the minister had said.
In connection with its investigations, The Indian Express had sent a detailed questionnaire to Awasthi. In response, Kamal Verma, Senior Executive Director, IFFCO, had said: “We are not aware about any transaction made by IFFCO worth over $18 million during March 2014to June 2014, which were red-flagged as suspicious in 2014. We confirm that there has not been any instance of financial irregularity, siphoning of money or money laundering.”
He added: “In case details of $18 million transaction are provided, relevant information for the same can be made available to substantiate the genuineness of such payments. During the referred period of March 2014 to June 2014, all payments against imports were made through authorized banks like, State Bank of India, HSBC, RBS, Kotak Mahindra Bank etc. against submission of documents…and the bankers release/remit the payments to the overseas suppliers only after effecting due diligence with respect to the authenticity of the transaction and the suppliers. The Board of Directors ofIFFCO has approved an elaborate procedure for purchase of raw materials and finished products. The Commercial Department initiates necessary actions for procurement of such material. All such proposals are being reviewed and approved by the Executive Committee of the Board of Directors. The Managing Director& CEO is not directly involved in procurement/purchase of raw materials.”
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