US court indicts Congress MP in mining deal scandal

US authorities also said they will be sending documents and the court order to India through diplomatic channels.

By: Express News Service | Published: April 23, 2014 9:59:58 pm

The CBI has asked the Andhra Pradesh CID to act against Congress MP K V P Ramachandra Rao after he was indicted by a US court in an alleged international racket involving bribes of $18.5 million for allowing mining of Titanium minerals in Andhra Pradesh.

Rao is said to be close to the late Andhra Pradesh chief minister Y S Rajasekhara Reddy and was reportedly indicted with five others by a US federal court earlier this month.

After the indictment, US authorities requested India for the “provisional arrest” of Rao, a Rajya Sabha member. The CBI, which acts as the nodal agency for Interpol in India, received the request from the US National Crime Bureau, which, however, did not seek Rao’s extradition or deportation. “We have forwarded the request to the concerned law enforcement agencies asking them to take appropriate action as per the law of the land,” a CBI spokesperson said.

US authorities also said they will be sending documents and the court order to India through diplomatic channels. The US indictment lists 57 wire transfers of funds between entities, totalling more than $10.59 million between 2006 and 2010. Besides Rao, an Ukrainian businessman has been accused of conspiring to bribe state and central government officials in India to allow the mining of titanium minerals.

The others named in the FBI’s investigations include Andras Knopp, a Hungarian businessman; Suren Gevorgyan from Ukraine; Gajendra Lal, an Indian national and resident of the US; and Periyasamy Sunderalingam from Sri Lanka.  According to US authorities, the accused allegedly conspired to pay at least $18.5 million in bribes to secure licences to mine minerals in Andhra Pradesh. The mining project was expected to generate more than $500 million annually from the sale of titanium products, including sales to an unnamed firm headquartered in Chicago.

The US FBI field office first arrested Ukrainian national Dmitry Firtash in March 2014 in Vienna in Austria. He was later released on bail.
“Firtash controls Group DF, an international conglomerate of companies that was directly and indirectly owned by Group DF Limited, a British Virgin Islands company,” according to a US Department of Justice statement released earlier this month.

“In April 2006, one of the companies of Group DF, Bothli Trade, and the state government of Andhra Pradesh agreed to set up a joint venture to mine various minerals, including ilmenite, a mineral which may be processed into various titanium-based products such as titanium sponge, a porous form of the mineral that occurs in the processing of titanium ore,” the statement said. “In February 2007, Company A entered into an agreement with Ostchem Holding, another Group DF company through Bothli Trade, to work toward a further agreement that would allow Bothli Trade the ability to supply 5 million to 12 million pounds of titanium sponge from the Indian project to Company A on an annual basis. The mining project required licenses and approval of both the Andhra Pradesh state government and the central government of India before the licenses could be issued,” the statement added.

As alleged in the indictment, the defendants used US financial institutions to engage in the international transmission of millions of dollars for the purpose of bribing Indian public officials to obtain approval of licences for the project. They allegedly financed the project and transferred and concealed bribe payments through Group DF, and used threats and intimidation to advance the interests of the enterprise’s illegal activities.

According to the indictment, Firtash was the leader of the enterprise and caused the participation of certain Group DF companies in the project. Firtash allegedly met with Indian government officials, including Chief Minister (Rajasekhara) Reddy, to discuss the project and its progress, and authorized payment of at least $18.5 million in bribes to both state and central government officials in India to secure the approval of licenses for the project,” the statement added.

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