TWO years after the Joint Parliamentary Committee (JPC) probing the multi-crore bank securities scandal recommended a CBI inquiry into the irregularities committed by Air India (AI), efforts are afoot in the Ministry of Civil Aviation (MCA) to save those allegedly involved in the scam.
Two important files, pertaining to the investment of Rs 328.91 crore from AI's surplus funds with 'unautho-rised' foreign banks and financial institutions, have been declared 'untraceable' by the MCA. In a letter to the director of the Central Bureau of Investigation (CBI), Civil Aviation Secretary Yogesh Chandra confirmed the fact that the files could not be found. An inquiry is on to ascertain the fate of the missing files.
The JPC, in its 1993 report, had brought out instances of irregularities in investments made with un-authorised banks and financial institutions by public sector undertakings (PSUs), including AI. The latter had made heavy investments with Citibank in April 1991 (Rs 96.77 crore) and SBI Caps in June 1991 (Rs 147.86 crore)—both in ready forward deals. It had also deposited Rs 35 crore in January 1992, and Rs 47.28 crore in February 1992 with Ind-bank Merchant Services Ltd. In addition, Rs 10 crore had been deposited with Citibank under its Portfolio Management Scheme in May 1992. Sources probing the scam point out that though the invested money was returned in due time, the banks and financial institutions had earned a profit of almost 100 per cent.
It may be recalled that the JPC report had held that the investments "were highly irregular and totally violative of the provisions of the Air Corporation Act". It had also objected to the manner in which agreements were signed by the AI authorities with Citibank, authorising it to invest in private equities. Subsequently, records were tampered with to cover up the deal, in order to show the investments as being deposits with the State Bank of India, a nationalised bank. The JPC had noted that "these actions were malafide" and recommended a thorough probe by the CBI to fix responsibility for the investments. The vigilance department of the MCA did conduct an inquiry, and laid the responsibility on S.R. Gupta, the former acting managing director of AI. Gupta, however, claims he had acted on instructions from the ministry.
Subsequently, the CBI registered a criminal case (RC No. 1/E/95) on April 28, 1995, under section 120(b), 420, 477A of the Cr PC on the basis of the JPC report, and questioned Gupta. He asserted that the decision to invest in the ready forward deal was cleared by higher authorities insent to S. Krishnamurthy, another joint secretary in the ministry. On getting a verbal green signal, Gupta noted on the file dated March 22, 1990: "Ravindra Gupta advised me that we can go ahead with investment planning."
After registering the case, the CBI began its investigations by trying to pinpoint the level at which the decision to invest with foreign banks and financial institutions was taken. With the buck being passed around by everyone, the investigating agency decided to go through the ministry files in which Gupte's letter seeking permission for investments was processed. Itsent a letter to the ministry on October 17, 1995, asking for the relevant files.
For four months, the ministry maintained an enigmatic silence. Finally, on February 9, 1996, Chandra responded to the CBI director's letter. He said the files in question were not traceable and that an inquiry committee to look into the mysterious disappearance had been set up. When contacted by Outlook , Chandra declined to comment on the issue.
According to a ministry source, the inquiry into the missing files is being conducted by an under secretary. But he doubts if anything will emerge. "They (the ministry) are ready to reconstruct the file with some of the photocopies of the missing documents which are in the records. This happens whenever big people have to be saved," he says.
