Among the many questions swirling around the tainted AgustaWestland deal are those that loom over the conduct of former Enforcement Director Rajan S Katoch.
The officer, who was unceremoniously removed from his position on August 1, 2014, after taking over in March 2012 and retired as Secretary (Heavy Industry) this February, is alleged to have dragged his feet for nearly seven months in the money laundering investigation related to the Rs 3,600-crore deal.
Documents accessed by Hindustan Times suggest Katoch wanted the kickback scandal to be investigated under the Foreign Exchange Management Act (FEMA), 1999. FEMA — where a made-out offence is compoundable — is a milder law compared to the much stringent Prevention of Money Laundering Act (PMLA), 2002, that can lead to arrest and confiscation of property of the accused. Katoch apparently overruled junior colleagues in the Headquarters Investigation Unit (HIU) who recommended that the case be registered under the PMLA.
There is documentary evidence to show that the Central Bureau of Investigation (CBI) sent its First Information Report (FIR) of March 12, 2013 on the purchase of 12 VVIP Augusta-Westland helicopters for 556.26 million euros to the Enforcement Directorate on December 11, 2013, a full nine months after investigations began.
The CBI sent the FIR after being reminded by the ED in writing on June 18, 2013 as the latter could only investigate the proceeds of a crime on the basis of the report.
After receiving the FIR, Katoch marked it for action to the HIU.
On April 7, 2014, when the first round of polling for 2014 Lok Sabha elections began, Katoch got the case file from HIU. On May 7, the penultimate round of nine-phase Lok Sabha elections, Katoch sent the case file to the Delhi Zonal Unit rather than then Special Director Karnal Singh, who was the overall in-charge of the Central Region comprising National Capital Region (NCR), Lucknow and Patna. Subsequently, the file moved significantly only after the NDA government took power.
HT tried repeatedly to contact Katoch but he remained unavailable.
Finance ministry sources confirmed that the file was put up to Karnal Singh on July 1, 2014 as Special Director (Central Region) and a PMLA case was registered on July 3, 2014, with Katoch being duly informed. Singh took over as Enforcement Director on August 15, 2014.
“There was considerable delay in registering the PMLA case and this has made our task tougher. For instance, call data records are only kept by the service providers for only a year. So if ED had registered the case within a month of CBI, then the CDRs would have helped in tracing the money trail,” said a senior official.
Another ED source sounded defensive about Katoch’s role.
“The ED Director himself does not conduct any investigation. The CBI had registered its FIR in the AgustaWestland scam in March 2013. Two months later, at a time the CBI had not shared its FIR with the agency, ED began proceedings suo motu under FEMA provisions,” he told HT.
“A case under the PMLA could not have been registered then since a copy of the prior FIR in the same case was required for that. The HIU probed the case under FEMA.”
The source went on to say, “When the CBI sent its FIR, the same was forwarded to ED’s Delhi zone. It was the Delhi zone that subsequently registered a case under PMLA in July 2014 to probe the case and filed a charge sheet too.”