ED finalises LRs in Chandraswami case

It transpires that Chandraswami was given part of the money by British business and media baron Tiny Rowland who fought a bitter battle with Mohammed Al Fayed to take over Harrods, the famous departmental store in London. Rowland had alleged that Al Fayed was not the real bidder and he was doing it for the Sultan of Brunei. The payment to Chandraswami was made allegedlyfor providing some audio cassettes containing "unspecified information." However, the "unspecified information", it was reported, was tapes which had Al Fayed admitting that he was bidding on behalf of the Sultan.

Rowland sent a letter to the Union Ministry of Finance and the Ministry of Home Affairs in February 1996, saying that in exchange for certain tape recordings he had paid $2 million to Chandraswami and Mamaji by way of a banker’s draft of credit. The ED which is in possession of the letter has also approached Price Waterhouse in London – the international audit company which had conducted an "emergency" audit of the BCCI.

The ED has repeatedly sent notices to Chandraswami and his acolyte Mamaji on the transactions. The last notice was sent on January 24. But they are yet to respond. The notices Section 8 (1) & 14 of the Foreign Exchange Regulation Act 1973 charges them with acquiring foreign exchange without the Reserve Bank of India’s (RBI) permission and then instead of offering the foreignexchange (US $5 million) for sale to an authorised dealer in foreign exchange in the country transferred the money to Khashoggi.

Chandraswami – when questioned by the ED about the transactions – claimed that he did not have accounts in any foreign banks and his disciples took care of all his worldly needs. He also claimed that being a spiritual person, he did not understand "complicated" financial transactions.