ED raids IFFCO, its MD in alleged cash laundering case

2020/10 15 09:10

Written by Deeptiman Tiwary
| New Delhi |

October 15, 2020 2:45:38 pm

The Enforcement Directorate (ED) on Thursday searched the premises of the co-operative large and its MD US Awasthi

Days after The Indian Categorical reported on alleged suspicious transactions of Indian Farmers Fertiliser Cooperative Restricted (IFFCO) with three corporations based mostly in Dubai, Switzerland and Singapore, the Enforcement Directorate (ED) on Thursday searched the premises of the co-operative large and its MD US Awasthi.

Sources mentioned the searches have been carried out in reference to a case of cash laundering registered by the ED for alleged irregularities within the cooperative’s monetary transactions.

IFFCO has been underneath the scanner of central businesses since 2011, when its then chairman Surinder Jakhar died in mysterious circumstances at a farmhouse, along with his physique discovered riddled with bullets and police claiming it to be a case of unintended hearth. Jakhar was the son of Congress chief Balram Jakhar.

A reference despatched to CBI and ED by the Central Vigilance Fee (CVC) then had alleged irregularities in procurement of uncooked materials for fertiliser from sure international international locations. Awasthi was then the MD of IFFCO and continues to carry the submit.

In 2018, the federal government had knowledgeable Lok Sabha that it had requested CBI to probe IFFCO and Awasthi for numerous irregularities. The latter was additionally to be probed for alleged cash laundering, the federal government had mentioned.

The Indian Categorical had on October 10 reported that IFFCO’s transactions with three corporations based mostly in Dubai, Switzerland and Singapore have been red-flagged by Deutsche Financial institution Belief Firm Americas (DBTCA) to the US monetary watchdog, Monetary Crimes Enforcement Community (FinCEN).

In July 2014, an SAR filed by DBTCA flagged 14 transactions of IFFCO involving transfers and remittances value $18.46 million. The SAR cited “detrimental info discovered on the MD and CEO of Indian Farmers Fertiliser Cooperative Restricted for potential cash laundering”.

On August 7, 2018, authorities had advised Lok Sabha that CBI had been requested to probe complaints — acquired between 2013 and 2017 — associated to the circumstances of corruption and irregularities in opposition to IFFCO officers, together with its MD U S Awasthi and his members of the family.

“Division of Fertilisers has referred numerous complaints pertaining to corruption and irregularities in IFFCO to CBI for enquiry/reviews and the identical are awaited,” then Minister of State for Fertilisers Rao Inderjit Singh had mentioned in a written reply to the Lok Sabha.

The circumstances, which the fertiliser ministry had requested CBI to probe, are associated to alleged cash laundering by the IFFCO managing director, his sons, family members and buddies related to the cooperative, Inderjit had mentioned.

In addition they relate to alleged grabbing of the visitor home and posh bungalow by Awasthi in an unlawful and illegal method, subsidy fraud by opening Kisan Worldwide Buying and selling, incomes large unlawful fee in imports of uncooked supplies and completed fertilisers thereby creating large loss to the society, the minister had added.

The minister had additional talked about that the circumstances to be probed additionally embody alleged “unlawful extension of Awasthi’s time period of superannuation past the age of 65 years, growing his remuneration and different practical administrators, looking for favours from political events by extending donations in a camouflaged means in violation of Multi State Cooperative Societies Act (MSCS), 2002”.

The circumstances are additionally associated to alleged defrauding the federal government by manipulating gross sales and claiming larger subsidy, illegally inducting kith and kin on appropriate posts in IFFCO by Awasthi and misusing assets and facility of the cooperative, he had added.

Moreover, the circumstances additionally contain alleged gross mismanagement of funds together with siphoning off cash and fabricating steadiness sheet by IFFCO, unsuitable disclosures in violation of established accounting practices and deceptive the stakeholders, particularly the banks, by IFFCO.

The complaints additionally embody manipulation of Multi State Cooperative Societies Act, additional manipulating bye-laws of society and unlawful repatriation of the federal government fairness by IFFCO Board, the minister had mentioned.

In reference to its investigations, The Indian Categorical had despatched an in depth questionnaire to Awasthi. In response, Kamal Verma, Senior Government Director, IFFCO, had mentioned: “We aren’t aware of any transaction made by IFFCO value over $18 million throughout March 2014to June 2014, which have been red-flagged as suspicious in 2014. We verify that there has not been any occasion of monetary irregularity, siphoning of cash or cash laundering.”

“In case particulars of $18 million transaction are offered, related info for a similar could be made obtainable to substantiate the genuineness of such funds. In the course of the referred interval of March 2014 to June 2014, all funds in opposition to imports have been made by means of licensed banks like, State Financial institution of India, HSBC, RBS, Kotak Mahindra Financial institution and many others. in opposition to submission of paperwork…and the bankers launch/remit the funds to the abroad suppliers solely after effecting due diligence with respect to the authenticity of the transaction and the suppliers. The Board of Administrators of IFFCO has authorized an elaborate process for buy of uncooked supplies and completed merchandise. The Business Division initiates obligatory actions for procurement of such materials. All such proposals are being reviewed and authorized by the Government Committee of the Board of Administrators. The Managing Director& CEO is just not immediately concerned in procurement/buy of uncooked supplies,” he additional mentioned.

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