Behind biggest I-T seizure,a case of multiplying crores

And,according to income-tax additional commissioner (Investigation) Ajit Kumar Srivastava,all of them may be linked.

At the centre of this alleged scam that unfolded following a tip-off received by the I-T department from the centre’s Financial Intelligence Unit is an unassuming 34-year-old and his meteoric rise from being the son of a Class III employee of BCCL to its youngest contractor,supplying the government subsidiary that produces the bulk of the coking coal mined in the country everything from electrical wires and bulbs to cement and sand.

I-T officials estimate L B Singh alias Lal Babu has cash deposits of over Rs 111 crore.

The seizure of his 11 accounts on November 25 yielded Rs 70.76 crore. The father of two sons who still lives in the small BCCL

quarters allotted to father Ramdev Singh at Kastaur colliery in Dhanbad also owns a fleet of cars and SUVs. Lal Babu grew up here along with six siblings — five brothers and a sister.

Having dropped out after matriculation,Lal Babu’s rise to riches,officials say,began with his association with two BCCL general managers,D C Jha and S P Singh,as well as BJP Jharia MLA Kunti Singh. The latter is the widow of the late coal mafia don Surya Dev Singh.

S P Singh incidentally was arrested by the CBI in 2009 for allegedly fudging BCCL accounts. The CBI had even accused Singh of trying to bribe its inspector Shayam Lama with Rs 5 lakh,through Lal Babu,to have the case dropped against him. However,the agency couldn’t prove this in court.

Soon after he was given BCCL contracts,Lal Babu was appointed the poll agent of Kunti Singh in the 2005 Assembly polls. After she won,there was no looking back for him.

Asked about her association with the BCCL contractor,Kunti Singh says: “Since Lal Babu hails from Ballia (Uttar Pradesh) like us,there was a relationship. Like many others,he had worked as election agent for me. But our relationship was never very close.”

BCCL Chief Vigilance Officer P K Sinha admits that the payments made to Lal Babu are being looked into. “We are inquiring into some complaints to ascertain if the company’s area management followed rules and regulations in processing bills and making payments to contractors,including Lal Babu,” he said.

IT Additional Commissioner Srivastava,who is supervising the case against Lal Babu,says “because of the patronage extended to him by Jha and S P Singh,he made huge sums in the name of filling up sand in (underground) mines”.

At a press conference the day after the raids,Lal Babu had denied the charges against him,saying he had been filing his income tax returns and there was a conspiracy in the allegations.

According to the IT department,Lal Babu owned 180 accounts of his proprietorship companies,run either by himself or in the name of his two minor sons,wife Arti,sister Suman,mother Prabhawati Devi and other relatives such as Yuvraj,Laxmi,Bina and Kiran. The accounts,holding Rs 112 crore,were frozen after Lal Babu was unable to explain the money in them.

“Arti denied having any knowledge of these accounts in her name. However,she admitted she used to sign documents as and when asked by Lal Babu,” said Srivastava.

Officials are also inspecting the cash trail of a BCCL official account in Dhanbad,which was hacked and Rs 21 crore transferred online to an account in Muzaffarpur on November 25. The bank noticed it and withheld the transaction. Three days later,Punjab National Bank in Ghaziabad froze an unnamed woman customer’s bank account after Rs 29.25 crore was transferred to it. The money was being transfered to her account in Modinagar branch of PNB in Ghaziabad from BCCL’s State Bank of India account in Dhanbad.