Fitting The Pieces Together

Now that the CBI has filed its sensational chargesheet against top politicians, thequestion uppermost in the minds of everyone is whether the investigating agency’scharges will stand in a court of law. While CBI officials see it as a "testcase" for the Prevention of Corruption Act, legal experts are of the view that it maybe difficult for the CBI to convince the courts in at least some of the cases. AsksRajinder Sachar, former chief justice of Delhi High Court: "Can a quid pro quo beestablished? Just payment of money may not be corruption." But despite such doubtsbeing raised, the CBI seems to be pushing ahead with its investigations and is piecingtogether the finer details of the transactions.

According to information made available to Outlook, the investigating agency hasdetails of secret bank accounts of the hawala dealers, the manner in which the money wasactually handed over to the recipients and the way transnational companies used the hawalanetwork to pay off bureaucrats and politicians. Says a top CBI official: "The qualityof the evidence will make the case stand. We will prove that the money was used by theleaders to acquire private assets."

Officials associated with the hawala probe have a detailed account of the role ofMadras-based Amir Bhai, one of the main hawala operators connected with the Jains. Amirhad two secret bank accounts—one in Antwerp and the other in Geneva. Transnationalswith business interests in India were depositing slush money in these accounts from whereit was routed through Amir Bhai’s hawala channels to the Jains to be disbursed amongIndian politicians and bureaucrats.

These channels were even used by corporations owned by governments abroad.Investigations have established that a major chunk of the Rs 10.5 cro re listed in theJain diary against industrialist Lalit Suri’s name came from Tyaza Premo, a companyowned by the Russian government. The firm was trying to bag the contract for themodernisation of the Durgapur steel plant. The Russian company deposited the money in oneof Amir’s bank accounts which was finally sent to the Jains through the hawalaconduit.

However, the money was not paid to Suri. S.K. Jain told the CBI that he met CaptainSatish Sharma in Lalit Suri’s Holiday Inn Hotel (now known as the Hilton) in Delhiand handed over the money to the former in his car. According to Jain, the reason whySharma’s name did not figure in diary was because he had instructed him not to recordthe transaction in his name. Since the amount involved was huge, Jain referred to it inhis accounts as cash paid to Suri.

This gives credence to Lalit Suri’s claim that he was not in India when thealleged transaction was made. Officials say that Suri might have been in the know of thetransaction but he did not actually receive the money. Perhaps this was the reason whyeven after conducting raids on Suri’s hotel last year, the CBI did not file achargesheet against him. Sharma, incidentally, was neither investigated nor were theplanned raids on him and godman Chandraswami carried out.

S.K. Jain’s statement to the CBI under Section 161 of the CrPC has allegations ofpay-offs not entered in the Jain diaries. Among the allegations made was that at leastthree politicians were paid through Sharma—Rajiv Gandhi (Rs 10.5 crore), J.Jayalalitha (Rs 2 crore) and Narasimha Rao (Rs 3.55 crore). The statement was recorded byAmod Kanth, DIG, CBI, who was supervising the probe. But the moment the PrimeMinister’s name came into the picture, he was pulled out and sent back to the DelhiPolice in May 1995.

One school of thought feels that S.K. Jain used the Prime Minister’s name as a redherring on his counsel’s advice. But according to Jain’s statement, it was R.K.Dhawan who introduced him to Rao just after he took over as Congress president in May1991. Going by the statement, Rao was looking for funds when Jain was introduced to him athis 9, Moti Lal Nehru Marg residence. Jain claims he "placed Rs 5 lakh in Rao’salmirah." A few days later when Rao went to Uttar Pradesh for the second phase of theelection campaign, S.K. Jain gave Rao another instalment of Rs 50 lakh. The money was paidby him in Uttar Pradesh.

The third meeting was fixed at Rao’s insistence in August 1991 when he becamePrime Minister. Jain told the CBI that on that occasion Rao demanded Rs 3 cro re from Jainto engineer a split in the Janata Dal. S.K. Jain had a couple of meetings with Sharma andChandraswami. It was decided that Jain would give Rs 2.5 crore to Chandraswami and Rs 50lakh to Sharma. The reason why Rao’s name did not figure in the Jain diary, sayofficials, was that it had already been seized in March 1991 by the CBI. However, the flowof money from the Jains had not stopped.

The trail that led to the Jain diaries started rather innocuously when the Delhi Policepicked up Ashfaq Hussain Lone, a deputy chief of intelligence of the Hizbul Mujahideen, aKashmiri militant group, at the Jamaat office in the capital’s walled city on March25, 1991. When Lone was arrested he had Rs 16 lakh in bank drafts and cash meant forKashmiri militant groups. Subsequent interrogation by the CBI led to the arrest ofShahabuddin Ghauri, a student of the Jawaharlal Nehru University, Delhi. He too was foundwith money to be distributed to militant groups in the Valley. Questioning revealed thathe was distributing money on behalf of five hawala operators— Shambhu Dayal Sharma,Mool-chand Sampatraj Shah, Mohammed Shahid, Rais Anwar and Nandkishore. The five werebooked under TADA.

The hawala operators came up with the names of Surendra Kumar Jain and Jainendra KumarJain, identifying them as the ‘kingpins’ behind the operation. This led to araid on the Jains on May 3, 1991 and the seizure of Rs 58 lakh in hard cash, Rs  10lakh worth of Indira Vikas Patras and $20,000. But more significant than the money werethe two diaries, two note-books and two files recovered from S.K. Jain. It contained alist of  115 names to whom the Jains had made payments. At this point, the CBI washeaded by Vijay Karan.

By March 1992, the investigators seemed too keen to get rid of the case and sent thediaries and notebooks to the ‘malkhana’, the dumping ground of all inconvenientor intractable cases. The case was officially closed and Lone and Ghauri werechargesheeted. The hawala operators were interestingly shown as ‘absconders’. Inthe first chargesheet filed there was no mention of the raids on the Jains. But even theinvestigators were not prepared for the spirited public response that the case evoked. TheHindi daily Jansatta front-paged the story on August 24, 1993, carrying most of thenames found in the diary.

Of the chargesheets already filed, the one against former minister Arif Mohammad Khanappears conclusive. It details the manner in which S.K. Jain paid Khan on behalf of theFrench company, Alsthom, after he cleared the Kawas power project in Madhya Pradesh. Theminister was paid a total sum of Rs 7.5 crore. Subsequently the CBI found a change"in the pattern of spending" of former minister Kalpnath Rai after the Ministryof Power cleared six projects of the NHPC and five of the NTPC between 1987 and 1991.Interestingly, Rai was minister of state for power between 1988 and 1989. The discovery ofdocuments with the Jains as well as the questioning of Rai corroborates the linkagebetween the dealer and the politician.

In May 1991, S.K. Jain visited Norway to attend the funeral of the Norwegian king withformer deputy prime minister Devi Lal. Jain, who wanted to further his association withDevi Lal, arranged a Honda Accord car for the latter’s grandson, Pradeep Kumar.According to the charge-sheet, Devi Lal also received a sum of Rs 50 lakh.

However, in the case of Yashwant Sinha and L.K. Advani, the CBI does not seem to haveadequate evidence of a linkage except that their names have been found in the diary.According to senior advocate Arun Jaitley, there is next to no evidence against Advani.

The hawala case will move into second gear once the CBI formally files its chargesheetagainst the three cabinet ministers —V.C. Shukla, Balram Jakhar and MadhavraoScindia. Since they have already resigned, no formal sanction from the cabinet is nowrequired. The SC has set January 30 as the date when the CBI has to report to it on theprogress of the case.

Ranjit Bhushan and Rajesh Joshi With Soma Wadhwa and Amit Prakash