A disk served cold stirs politics in Chhattisgarh

Since the CD surfaced,the Congress has organised a meeting of depositors who had lost their money,has held one of its largest dharnas in Raipur,has gheraoed Singh’s home,and is now planning a rath yatra through the capital with a screen to play the CD,of which it has made 2,000 copies for public distribution. Two of the ministers named,Moonat and Brijmohan Agarwal,have their constituencies in Raipur. The BJP ministers have travelled to Delhi to present their case before the central leadership.

The bank

In August 2006,the Raipur-based Indira Priyadarshini Mahila Nagarik Sahkari Bank defaulted on payments. Depositors vandalised the bank,while a case was filed against manager Sinha,president Tiwari and the bank’s directors. They were arrested and charged with criminal conspiracy,misappropriation of money,forgery and cheating,and the Reserve Bank of India cancelled the bank’s licence. Inquiries by RBI and the cooperatives department,and audit reports found the officials guilty of bungling; the departmental probe found Rs 54 crore had been embezzled.

The bank had given unsecured loans of over Rs 18 crore to companies,which probes found had been formed by a co-accused,Neeraj Jain,and the amount was never recovered. It was found to have issued fixed deposit receipts to persons who had no deposits,flouted RBI guidelines on statutory liquidity ratio and concealed crucial information from RBI.

According to a probe report by L L Rayast,investigating officer for the cooperatives department,the bank in June 2005 reported a shortage of Rs 30.16 lakh in its SLR funds,and this increased to Rs 581.67 lakh by August 2006. As depositors approached the bank for withdrawal,the report said,the directors withdrew their own deposits and the information was then leaked to selected depositors,leading to withdrawals of Rs 15.99 crore between the five days from July 27 to August 1,2006. With the bank going bust,over 23,500 depositors were estimated to have lost over Rs 25 crore. “The bank gave wrong information to RBI that caused the crisis,” Rayast said in his 2006 report.

The RBI report noted that none of the directors was a banker and blamed them for financial and procedural irregularities. The bank gave unsecured advances to the directors and their relatives,the RBI report said. “The Board of Directors had failed completely to handle the affairs of the bank. At the time of the crisis,instead of supporting the bank they withdrew the fixed deposits kept in their name or their relatives and thereby aggravated the problem,” it said.

The directors included prominent members of Raipur’s business community and relatives of some Congressmen. The police made arrests soon but the accused were eventually released on bail. The Cooperative Society registrar wrote to the cooperatives secretary in February 2010 demanding a CBI probe. The Congress now claims that it was because the CM and the ministers had been bribed to suppress the case that the government never pushed for a CBI probe.

The CD

In 2007,a Raipur court allowed the police to conduct a narco test on Sinha. It was conducted in June 2007 but the police never produced the CD before the court. In 2010,Sinha applied for a copy but was not provided one,says his advoctate,S K Farhan. After the Congress released the CD,the police stressed it was inadmissible as evidence,but unlike the government they have not challenged its authenticity.

“This CD does not establish the crime. A narco test is not legal evidence under the Evidence Act. The prosecution officer concurred that such evidence can be used only when there is corroborative evidence,” Raipur IG GP Singh said,adding,“There is a contradiction among the contents of the CD,which emerged during investigation.”

The CD shows Sinha as saying at one point,“I gave money to Raman Singh directly”. On a few other occasions,he says he gave the money to Singh’s personal assistant. As for the money he claims to have given Netam,he puts it at Rs 1 crore on one occasion and Rs 2 crore on another.

Where Sinha is consistent is that the irregularities he confesses to have committed were done at the instance of Tiwari and a board of directors member,Savita Shukla,also among the accused. Some of the other probe reports too record such statements. As in the narco test,he had stated before Rayast’s inquiry team that Tiwari and Shukla “had pressurised him to forge pay-orders and demand drafts”. While the two denied the allegations,Rayast’s report accepted Sinha’s version and held them responsible. The police chargesheet also books them for these charges.

In the CD,Sinha is shown as saying he paid the bribes,too,at the instance of the senior officials. Minister Brijmohan Agarwal said,“This CD is not authentic. The matter is in court and the case is very old.”

Then Tiwari dismissed Sinha’s charges. “It is a conspiracy,a lie,that he paid the amount on my behalf to the CM or other ministers… He is a criminal and his entire statement is to protect himself and mislead the police. Sinha was so expert that he even manipulated those who conducted the test,” she said.

Within hours,the government was circulating her statement. “It is shameful that the government is seeking a character certificate from an accused,” said Bhupesh Baghel,the Congress leader who had released the CD.

Dainik Bhaskar carried a report saying one of its reporters visited Sinha’s home last week and found a government officer there,with whom her husband was negotiating a job offer. He had reportedly given the officer his CV. Other publications that sent reporters to her home,too,reported the presence of police and government officers there. The Congress has since said the government had lured her into giving a statement. Tiwari and the government have denied this.

The cash

Depositors are hopeful the revival of interest will translate into repayment — Rs 16.15 crore remains due to 971 depositors — but the police are not optimistic. Of the 971 depositors,503 had under Rs 1 lakh,these deposits totalling Rs 1.67 crore. The bank has Rs 20.99 crore pending from 753 debtors,including Rs 18.22 crore from 16 firms. “Since most of these firms are fake,recovery is difficult,” says a police release.

CM Singh has promised steps to ensure the depositors are repaid. Among those hopeful are farmers,vegetable merchants,labourers and women living in old-age homes. “I have Rs 4 lakh stuck in the bank. My future plans were ruined,” says Suresh Jain,a merchant.

Inside the bank,covered in cobwebs,lie old files,boxes,furniture as they were in 2006. Investigation officers are yet to seal the premises and seize all the material.

CD politics

The CD was already circulating within a closed circuit of politicians and journalists in Raipur for some years. PWD Minister Brijmohan Agarwal,who calls it fake,says he saw it a few years ago. After Congress programme coordinator Bhupesh Baghel released it,the party has tried to link it with an SMS from Nand Kumar Patel’s son Dinesh to party leader Shailesh Nitin Trivedi about a possible “revelation that would force the CM to resign”. Party sources say Baghel had long been trying to out the CD,but few other leaders were keen. He eventually decided to do it on his own. The scandal has given fresh wind to the Congress,struggling since the Darbha attack in which Patel and other leaders died. Baghel and Trivedi’s stature has risen; PCC chief Charan Das Mahant has said Baghel is among three CM probables should the party win.