As mining baron and former Karnataka minister Gali Janardhan Reddy prepares to resume his political career with the BJP after spending 40 months in jail following his arrest for illegal mining, investigators say authorities in three tax havens where the bulk of his wealth is allegedly parked are not cooperating with the CBI.
The governments of Mauritius, Singapore and the Isle of Man, a British crown dependency with an independent administration, are not sharing any information with the Central Bureau of Investigation, which is on the money's trail, officials said.
Anti-corruption activists, who first uncovered the former minister's role in the iron ore mining scam, claim Reddy has parked between Rs 40,000 crore and Rs 50,000 crore in accounts in the tax havens. Sources in the CBI Bengaluru describe these claims as "outlandish" and say their estimates are closer to the Rs. 5,000-crore mark.
Either way, India is nowhere close to recovering the loot.
The Supreme Court granted bail to Reddy on Tuesday, observing that the CBI had no objection to his release. Reddy is facing several criminal cases and was held in an Andhra Pradesh jail since September 2011.
The criminal charges against Reddy relate to the Andhra Pradesh branch of the multi-billion dollar mining empire he runs with family and two brothers, popularly called the Bellary brothers.
In early 2012, the CBI in Bengaluru received a tip-off from a central agency that the money had been stuffed into accounts in Mauritius, Singapore and the Isle of Man.
Following this lead, detectives found that Reddy had allegedly opened multiple bank accounts in the name of two front companies - GJR Holdings in Mauritius and GLA International Trading in Singapore.
"The quality of the information we received on the accounts in the (Isle of Man) was very poor. We have not discovered a front company there. But we believe that the money was directly transferred into bank accounts there," a CBI source said.
In May 2012, the CBI sent Letters Rogatory or formal requests to these countries seeking information on these accounts and front companies, and asked for the money to be repatriated to India.
"(The governments of) Mauritius and Singapore did not bother to even respond and the UK government responded with a bunch of questions that we did not have answers to," said one source.
In October 2014, the UK government sent a slew of questions to the CBI. The agency was asked if it had specific information about accounts held by Reddy or his associates in the Isle of Man. "We were also asked to prove that accounts held by the Reddy brothers had been filled with illegal money," one detective said.
A CBI officer in Hyderabad, who works closely with the Bengaluru team, seemed frustrated as he told HT, "There are limits to what the CBI can achieve without assistance from other central agencies."
The officer did not comment when asked if the CBI had sought assistance from central agencies such as the Financial Intelligence Unit-India (FIU-IND) which reports directly to the Finance Minister. FIU-IND is "responsible for coordinating and strengthening efforts of national and international intelligence, investigation and enforcement agencies in pursuing the global efforts against money laundering".
When the same question was posed to the Bengaluru CBI, one investigator termed it "speculative" while another said tersely, "I am a police officer. I don't make political decisions."
Reddy's lawyer, C H Hanumantharaya was asked to respond to the CBI's claims about his client's offshore accounts. "We have no idea what they (CBI) is talking about," he said, adding that Reddy will respond to such allegations only when they are raised through proper channels and as per due procedure.