Regularly routed cash through hawala, top Birla executive tells Income Tax

Saxena, the IT report says, admitted that he had personal custody of the keys to two steel almirahs which he kept in the safe in his cabin where Rs 25.13 crore in cash was found in a search operation on October 15, 2013. The search was conducted as a follow-up to the CBI probe into the allocation of coal blocks to Birla’s Hindalco Industries Limited. Saxena, the IT report says, “could not explain the source of cash.”

Saxena has said, according to his statement recorded under IT proceedings, that all cash transactions including disbursals and payments were done on the instructions of Group Executive President Shubendu Amitabh.

The Indian Express handed over a detailed questionnaire on the contents of the report at a meeting with top Aditya Birla executives in Mumbai but the company declined to comment.

It is known that two petitions were filed in connection with this case before the Settlement Commission for grant of immunity—-one by Amitabh and the other by a Kolkata-based company named for money transfers—-but both were rejected for being incomplete disclosures. Interestingly, while Saxena was called on 12 different occasions for recording of his statements, Amitabh was called 14 times.
“Huge cash used to be received at this premises (the company’s office on Parliament Street, New Delhi) regularly through the network of angadias, that is, hawala operators,” the IT report says. It quotes Saxena as having said in the report, that “the same was paid/disbursed to certain unidentified persons on regular basis.”

Saxena’s claim, that unaccounted cash used to be received by him at the office premises of ABMCPL, the report says, has been corroborated by one Jalu Ram, one of “Delhi’s leading hawala operators,” also in a statement to IT investigators.
While the CBI initially filed a closure report in the coal blocks case, the Special Judge last month asked the agency to re-investigate the case and question former Prime Minister Dr Manmohan Singh (who was also Coal Minister at the time) as well as other officials of the Prime Minister’s Office (PMO).

Initially, the CBI—-monitored by Supreme Court—-conducted searches but later brought in IT officials to probe cash reserves lying at the ABMCPL offices.

The appraisal report was sent to the assessment unit by the IT’s Investigation Wing as part of a letter dated February 27, 2014. The wing “estimated undisclosed income at Rs 203,18,01,244/- in hands of different persons”  and asked the assessment wing to arrive at the exact quantum of evasion after carrying out further investigation.

The report is with IT’s assessment wing (central circle) in Mumbai with March 31, 2016 being the deadline for the Department to finalise its proceedings and send notices to the company. In the covering letter, the IT investigation wing has stated that the appraisal report was “suggestive” in nature and that a “final conclusion” should be arrived at.

A top CBDT official confirmed to The Indian Express that “all aspects” of the appraisal report were presently under scrutiny of the assessment wing and that it was likely to be finalised before expiry of the limitation period.

\”The assessment wing will be examining all aspects, including the allegations of hawala deliveries and also examine all documents recovered during the search. Notices for the same have already been sent by the assessment wing to the company in Mumbai,” the CBDT official said.

Asked how the angadias (meaning couriers in Gujarati) used to operate through his company, Saxena is quoted as having told investigators: “We received telephone from the angadias, the amount is communicated in some coded words. Sometimes we have to collect the cash from the address given by them. We do not keep their contact numbers.” And “mostly cash is received in the range of approximately Rs 50 lakh to Rs one crore each time. There is no fixed interval. Sometimes we receive twice a day and sometimes there may be a gap of 3-4 days.”

He said that the angadias used to come with a token number of a Rs 10 or Rs 20 currency note that would be used as a code before the cash was delivered. He added that “disbursal or payment in cash was made” probably as “gifts or donations” by company officials to payees whose identity he did not know.

His statement reads, “We are instructed by Mr Subhendu Amitabh to disburse or make payment of a particular amount through our senior officers of the company to some persons but the purpose of such disbursal or payment is not communicated to us…”

Saxena claimed that the last time he received cash was from Jalu Ram in the range of Rs 50 lakh to the Birla office about 15 days prior to the IT search operation, but added that he did not remember the exact date.

The appraisal report mentions that inquiries by IT sleuths revealed that Jalu Ram was one of the “biggest hawala operators” of Delhi and subsequently, on February 7, 2014, his premises in Naya Bazar were examined.

Following the recovery of about Rs 47.04 lakh in cash, IT officials recorded the hawala operator’s statement in which he could not explain the source of the cash. He also admitted to conducting business on a commission basis and that he had delivered cash to Saxena.

On the significance of Ram’s testimony, the appraisal report states: “The statement of Shri Jalu Ram corroborates the admission by Shri Anand Kumar Saxena that unaccounted cash used to be received by Shri Saxena at the office premises of AMBCPL, New Delhi. Also, it makes amply clear that the names of the persons mentioned in the various pages of the notebook…have some nexus with the unaccounted cash received in the office premises of ABMCPL.”

This “notebook” refers to one that was recovered from Saxena’s desk which purportedly contains records of transactions from July 2010 to March 2012.

Saxena told IT investigators that he had been maintaining records of unaccounted cash transactions over the previous five years and reiterated during questioning that “the amounts written in the notebooks were received in the form of physical cash from hawala operators & the name in most of the cases have been mentioned”. One notebook had been recovered by the search team, but “other such records of unaccounted cash transactions have been destroyed.”

The verbatim reproduction of the 49-page notebook recovered during the raid (marked Annexure A1 by IT) as well as that of other papers purportedly containing record of several transactions recovered during the search have been attached as annexures along with the appraisal report.

Meanwhile, Amitabh, in his affidavit, a copy of which was submitted to IT, said that he was “in overall charge of the affairs of” the ABMCPL office located at UCO Bank Building, Parliament Street, New Delhi.

He claimed that while “awaiting instructions from the company on use of the cash received and kept by me in the Delhi office for safe-keeping, I on my own deployed the said funds in money lending activity / real estate project finance for earning interest/income therefrom…the money utilised by me in the aforesaid manner gave substantial returns on the funds so utilised.”

He added that he was unaware of the recovered cash and notebook maintained in his office listing coded payments and receipts but later changed his version.

The IT observed  that his stance “does not seem to be above suspicion” and noted “..his (Subhendu Amitabh’s) reluctance to reveal the truth about the transactions and his theory of  alleged money lending and real estate business activities without any corroborative material whatsoever…” It added that “he is not inclined to come out with the full truth and the real nature of such transactions.”

The conclusion of the IT Department (page 149) is that, “From a plain reading of Annexure A-1 and in the light of the statement of Anand Kumar Saxena, the modus operandi detected is that unaccounted cash was regularly received under different account heads from different persons and companies of Aditya Birla Group through the angadias i.e. local hawala operators. The receipt of the funds used to be followed up by various employees of the group with Shri Anand Kumar Saxena. Then,  the amounts received under various heads were transferred to ‘HQ’ account from where payments are seen to be have been made to different persons whose identities were not revealed…”