EXCLUSIVE narcotics
The arrest of Yogesh Bakshi, a Nicholas Piramal sales manager, has blown the lid off a flourishing drug racket
Has Nicholas Piramal India Ltd (NPIL), one of India's leading pharma majors, sullied its hands in smuggling Phensedyl—a cough syrup which contains the narcotic codeine—to Bangladesh? The arrest of Yogesh Bakshi, national sales manager of Actis, an NPIL division, in Ahmedabad on July 1, "under Section 8 (C) read with 21, 23 and Section 29 of the Narcotic Drugs and Psychotropic Substances (NDPS) Act of 1985", is an embarrassment to the pharma group which enjoys a healthy reputation.

According to the remand application (F.NO.NCB/AZU/CR-02/2005) filed by the Ahmedabad zonal unit of the Narcotics Control Bureau (NCB) on July 2, 2005, before the chief metropolitan magistrate, Bakshi was arrested "in connection with the diversion of codeine, a narcotic drug contained in the cough syrup Phensedyl." The NCB went on to state that "...intelligence available with NCB indicates that...
Of the 3-3.5 crore Phensedyl bottles sold in the Northeast, 2.5 crore are for addicts.
Yogesh Bakshi and other...stockists and transporters of the company at Calcutta and Agartala are diverting/smuggling... Phensedyl to West Bengal and the Northeast region and Bangladesh for non-medicinal use, i.e. drug abuse in an organised manner and with full knowledge and for material gains." Phensedyl is one of the bestselling products of NPIL.

According to the NCB's case, four lakh bottles of Phensedyl—containing 80 kg of codeine—were seized recently while being smuggled across the Indo-Bangladesh border. Further, Bakshi had "diverted more than three crore bottles" to the Northeast region in the last three years—containing 6,000 kg of codeine.

The agency accuses Bakshi of ordering—as reflected in the invoices—the supply of 8.08 lakh bottles of Phensedyl, containing approximately 200 kg of codeine, in 2004-05 alone to M/s Bejali Medical Agency in Belonia (pop: 2,000), a sub-divisional headquarter on the Bangladesh border, 120 km from Agartala. A team of NCB officers who searched M/s Bejali found that the 10 feet by 12 feet shop was abandoned and no medical sales had taken place there. Intelligence, quoted by the NCB, states that approximately 20 lakh bottles of Phensedyl which arrived in this region have been diverted in the last three years.

So, what is codeine? If cocaine is the drug of choice for the rich and famous, codeine, an opium derivative and a narcotic drug found in Phensedyl, a cough suppressant, does nicely for the not so rich. It is widely abused, not just in India, but also in Bangladesh, Nepal and Myanmar.

Indeed, the illegal shipment across the border had assumed such serious proportions that in 2004 the Bangladesh government formally asked the Indian government to take steps to stop the "smuggling" of Phensedyl into its territory. The Myanmar government went a step further and banned Phensedyl altogether. Doctors in India point out that as a prescription drug, Phensedyl is safe, but if consumed in large quantities it leads to addiction.

The NCB charges are scathing. It accuses Bakshi of "destroying material evidence and trying to mislead the inquiry by supplying wrong data." It concludes that Bakshi, as head of sales, Actis, was aware of the high price Phensedyl commanded in the border areas when it was smuggled (while it is available for Rs 35 per bottle at a chemist, it fetches Rs 140 to Rs 145 at the border). He also knew that the dispatched quantities were not reaching stockists in Agartala but were being diverted from the transporter's godown.

"The Drug Controller of Tripura," the NCB told the court, "had cancelled the drug licence of major stockists of NPIL for non-availability of records of sale of codeine- containing cough syrup, namely Phensedyl, for medicinal use". Information with the NCB indicates that "of the 4-4.5 crore bottles produced by NPIL, around 3-3.5 crore bottles are sold in the Northeast and West Bengal." Of this 2.5 crore bottles are diverted to addicts. Interestingly, one crore bottles of Phensedyl are "sold" annually in Tripura which has a population of 32 lakh, whereas five to six lakh bottles are sold in Gujarat (pop: five crores).

For the Indian government, the case has ramifications which go beyond the addiction that the diversion of Phensedyl is fostering. As the NCB has pointed out in court, the approximate annual Rs 200 crore profit from smuggling the cough syrup goes into "the hands of...smugglers, insurgents and anti-social elements". It adds that, for instance, the NCB has been able to establish a nexus between the smuggling of Phensedyl and the terrorist group, the All Tripura Tiger Force.

Minister of state for home Sri Prakash Jaiswal, while not commenting on the case, said, "Drug smuggling on the Indo-Bangladesh border is causing great concern." Home ministry sources indicated that all zonal heads of the NCB have been summoned for a high-level meeting to discuss the NPIL case next week.

As far as the case is concerned, while the Gujarat high court refused bail to Bakshi, a similar application in the Bombay High Court has resulted in a transit bail for a few days. But the court has asked nine persons, including the presidents of marketing and sales of NPIL—all those involved in the production and sale of Phensedyl—to appear before the metropolitan magistrate in Ahmedabad in the next few days. Government sources added that thus far, the NPIL's defence has been that since the concentration of codeine in Phensedyl is within the legally prescribed permissible limit and the latter is a therapeutic drug, it cannot be classified as a narcotic drug covered under the NDPS Act. It was also argued that the NPIL gets Phensedyl manufactured from a third party and then sends it through various transporters to its four hubs and from there to carrying and forwarding agents at 24 locations. The company, thereafter, loses control and property over the goods once they are sold to the stockists. Thus far, the NCB, sources said, has not been impressed by this line of argument.

Given the sensitivity of the case—which has an international dimension—and the high profile of the company and its chairman, Ajay G. Piramal, officials, both in the NCB and the home ministry, are tight-lipped on the issue. Indeed, government sources said there was a great deal of pressure on the investigating agencies—even from ministers of the previous NDA government—to keep the case under wraps.

After all, NPIL is the flagship company of the Rs 2,500 crore Piramal Enterprises (PEL), one of India's largest diversified business houses, which also has interests in retailing, textiles, auto-components and engineering. The group is headed by Ajay Piramal, who is also the chairman of NPIL. He holds several positions of eminence in Indian industry which includes being a member of the Prime Minister's Council for Trade and Industry and the Prime Minister's Taskforce on Pharmaceuticals and Knowledge-Based Industries, External Director, State Bank of India and Member, Board of Trade (constituted by the ministry of commerce).

At the end of the day, the big question is: was NPIL betrayed by its senior executives or was everyone in the know and quietly raking in the profits? With the case in court, more sordid details of the illegal trade indulged in by senior executives of the company are likely to surface in the days to come.

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