EVEN as Prime Minister H.D. Deve Gowda reiterates that the law will take its course in the sensational Rs 133-crore urea scam, there are serious doubts over whether the CBI will be able to nail the big players, including Prabhakar Rao, son of former prime minister and Congress president, Narasimha Rao.
The doubts arise because pressure from the Congress—which props up the United Front Government—may slow down or even thwart the investigations. The fear is that after an initial flurry of headline-grabbing arrests, the investigations may peter out—or that some of the 'lower-down' accused may be made scapegoats.
According to CBI sources, two lobbies—one represented by M. Sambasiva Rao, Indian agent of the dubious Turkey-based company, Karsan, and the other by Prakash Yadav, son of former fertiliser minister Ram Lakhan Singh Yadav—were working simultaneously in getting the deal through. Sambasiva and Sanjeeva Rao, brother-in-law of Narasimha Rao's second son Rajeshwar Rao, knew each other since college days. Sanjeeva, because of his proximity to the then prime minister, had a lot of clout in government undertakings. He introduced Sambasiva to C.K. Ramakrishnan, managing director of National Fertilisers Limited (NFL) and, along with Yadav, pressured him to clear the deal.
On the other hand, CBI officials say Prakash Yadav used to "interfere in almost each and every deal" the fertiliser ministry signed. In the urea deal, too, he had an understanding with Sambasiva and Sanjeeva Rao. After the deal was through, Prakash got his share of $200,000, which was deposited in the account of his US-based front company, Rea Brothers. Ram Lakhan Singh Yadav refuses to comment on his son's arrest "at this stage". "I did everything possible...I will talk about it at an appropriate time," he adds.
That Narasimha rao is not taking the case lightly became clear on June 19, a day after Sanjeeva and Prakash were arrested, when he gave a thinly-veiled warning that any "grave mistake" committed by the Deve Gowda Government could compel the Congress to rethink on its support. Though Rao didn't mention the urea scam, much is being read into the timing of his statement. Prabhakar, an alleged recipient of the urea kickbacks, had by then been questioned by the CBI. To many, Rao's statement was clearly aimed at reminding the UF Government of its vulnerability. And it's not just the urea scam that goaded him—the JMM bribery case, in which Rao is one of the accused, too, is picking up pace.
That Prabhakar was trying to buy time became apparent when he didn't appear for a second round of questioning by the CBI. He asked for more time, which the agency promptly agreed to. When he was first summoned to Delhi on June 15 for questioning, he called it a "politically motivated gameplan". Though all fingers point at the Raos, investigators are still balking at coming out with a categorical line of action against Prabhakar. Strangely, the CBI, which normally keeps everything under wraps, seem eager to absolve Prabhakar even without the investigations having come to a conclusion. Said a CBI spokesman: "Prabhakar Rao does not have any role in getting the deal cleared".
As far as the other allegations of kickbacks are concerned, the CBI is quick to retort: "The investigations are on". But the fact remains that the CBI has already given enough time to Prabhakar to prepare his def-ence. The general impression is that the agency is giving Prabhakar the kidglove treatment. It has not yet raided his house, nor has it seized any incriminating documents from his office. Some CBI officials fear that giving such a long rope to a suspect could give him time to destroy evidence.
There was an obvious attempt at the highest level to protect Prabhakar—clear inthe calculated delay in ordering a probe ever since the scam broke. The correspondence between Fertiliser Secretary Indrajit Chaudhary, Cabinet Secretary Surinder Singh and A.N. Verma, principal secretary to Rao when he was prime minister, shows that despite Chaudhary's repeated requests for a probe into the fraudulent deal, there was no positive response.
On March 24—around the time the urea scam hit the headlines—Chaudhary wrote to the Cabinet Secretary about how the contract with Karsan was "signed in a hurry". Chaudhary wanted the Rao government to initiate a probe immediately, but his requests fell on deaf ears.
The PMO was involved in more ways than one. It was revealed that a senior PMO official's son used to collect hawala money on behalf of Sambasiva Rao. The money, routed to India through hawala channels, was delivered at Sambasiva's residence. From there, Anand, son of V.R. Krishna Moorthy—officer on special duty in the PMO—and one Pawan collected it for onward distribution. Both worked for Sanjeeva Rao. The CBI interrogated Anand to get details of Sanjeeva Rao's activities.
Initially, it seemed the urea scam would blow over after a few minor players were sacrificed. Nobody had thought that Sambasiva's interrogation would open a Pandora's box. He named Sanjeeva Rao, Prabhakar Rao and Prakash Yadav as recipients of the$4 million kickbacks, routed to India through the Dubai-based company, Edible Oils and Food Stuffs Limited.
On second thoughts, he tried to retract his statement, on the basis of which the CBI arrested Sanjeeva and Prakash. In fact, with Sanjeeva's arrest, it was more or less established that a scam of such magnitude would have been impossible without political backing. While remanding the two accused to police custody, Chief Metropolitan Magistrate Prem Kumar observed: "The haste with which the entire transaction was gone into...could not be possible without political patronage." Adds a senior official: "Pick up any thread in the whole scam and it will lead you to a set of players connected to the former power centre."
Investigators feel one of the things that may go against Prabhakar is the piece of prime land at Nampally which was bought for Rs 1.5 crore, but is worth ten times more. Sambasiva says this is Prabhakar's benami holding. Sambasiva purchased the land in the name of Sai Sree Projects—a company floated two days before the purchase. He has admitted that he was working on Sanjeeva Rao's instructions. As it happens in benami deals, it will be difficult for the CBI to prove the property belongs to Prabhakar, unless the original owner spills the beans. In this case, say officials, the original owner is also not traceable.
That was not the only investment made by the recipients of the kickbacks. The CBI says that of Rs 133 crore, only Rs 14 crore was routed back to India. However, it still does not have any clue about rest of the money. There are several missing links in the murky deal. The two absconding hawala operators—Rajendra Babbani and Dharmesh Yadav—who routed the kickbacks to India are vital to the case. "Unless they are arrested and interrogated, it will be difficult to prove how the money was distributed," says an official. Non-bailable warrants have been issued against them. Sources say they are holed up in Dubai.
In coming weeks, one thing should be clear: whether the CBI will close in on the likes of Prabhakar or whether the law will take its own slow and meandering course.