CBI books ex-finance secy Arvind Mayaram for graft in bank note security thread
CBI has also booked British bank notes printing firm De La Rue International Ltd, and unknown officials of finance ministry and the Reserve Bank of India (RBI) for the alleged irregularities
The Central Bureau of Investigation (CBI) has filed a corruption case against former Union finance secretary Arvind Mayaram, British bank notes printing firm De La Rue International Ltd, and unknown officials of finance ministry and the Reserve Bank of India (RBI) for alleged irregularities in the supply of exclusive colour shift security thread for Indian bank notes, people familiar with the development said on Thursday.
Raids were carried out on Thursday at a few places including Mayaram’s residence in Jaipur and Delhi in the matter, they said.
The federal agency had received a complaint regarding irregularities from the department of economic affairs in February 2017, after which a preliminary enquiry (PE) - a precursor to the first information report (FIR) - was registered in 2018.
About a month ago, the agency concluded that allegations against Mayaram are enough to formally charge him in the case after which prior sanction under Section 17A of the Prevention of Corruption (PC) Act was taken from the ministry of finance and a FIR was registered on Tuesday.
The 1978 batch retired IAS officer of Rajasthan cadre, Mayaram, De La Rue and unknown officials have been booked for criminal conspiracy, cheating and sections pertaining to criminal misconduct and undue benefit under PC act.
According to the FIR, seen by HT, the enquiry revealed that the Indian government had entered into an agreement with M/s De La Rue International Ltd for supply of exclusive colour shift security thread, (which is available in every bank note) for Indian bank notes in 2004 for a period of five years.
The contract agreement, CBI says, was subsequently extended ‘four times’ till December 31, 2015.
Former Union finance minister on July 17, 2004, had authorised RBI to enter into Exclusivity Agreement with the suppliers of exclusive security feature on behalf of Indian government, CBI FIR states. P Chidambaram was the finance minister then.
Thereafter, a sub-committee headed by P K Biswas, executive director RBI, was constituted to go through all aspects of exclusivity of three security features firmed up for Indian banknote papers and also to go into the details of prices, it adds.
“The exclusivity agreement was signed by RBI with De La Rue on September 4, 2014. It was stated in para 2 of the Preamble at Page 2 of the agreement that ‘whereas De La Rue has developed an exclusive India specific green to blue colour clear text MRT machine readable security thread of use in Indian banknote paper and for which De La Rue holds exclusive manufacturing rights,” CBI states.
Asserting that De La Rue made claims about patent, the CBI FIR alleges - “De La Rue made false claims of holding patent and they didn’t have any patent for their colour shift thread at the time of presentation in 2002 and their selection in 2004.”
“Enquiry has also revealed that De La Rue applied for patent in India in the name of ‘A Method of Manufacturing a Substrate’ having colour shift effect only on June 28, 2004. Date of publication of patent was March 13, 2009 and date of grant of patent was June 17, 2011. Enquiry further revealed that Exclusivity Agreement was signed by P K Biswas without verification of patent claim of De La Rue. The contract agreement didn’t have any termination clause,” CBI FIR says.
The agency has claimed that Mayaram didn’t keep finance minister in loop about the anomaly.
“Both, RBI and SPMCIL (Security Printing and Minting Corporation of India), on April 17, 2006 and September 20, 2007, respectively, submitted their reports regarding non-possession of patent by De La Rue for their colour shift thread but Arvind Mayaram never apprised the same to the finance minister,” adds the CBI FIR.
Besides, despite non possession of patent, the contract agreement with the British company was extended time to time till December 31, 2012, CBI says.
The CBI enquiry has revealed that on May 10, 2013, the matter was brought to the notice of Mayaram, who was then secretary, department of economic affairs, that the contract agreement of De La Rue had expired on December 31, 2012, and extension could not be granted legally.
However, the CBI probe revealed, Mayaram, on June 23, 2013, “approved three years extension of an expired contract to De La Rue.”
“He also overruled the fact that extension cannot be granted without obtaining mandatory security clearance from the ministry of home affairs (MHA). Mayaram also didn’t take the approval from finance minister for this instance, whereas previous three extensions – from September 4, 2009 to June 30, 2011, from July 1, 2011 to December 31, 2011 and from January 1, 2012 to December 31, 2012, were approved by the finance minister,” CBI adds.
The agency claims that Anil Raghbeer, signatory of the contract agreement from De La Rue, has received ₹8.2 crore from offshore entities apart from remuneration paid by De La Rue in 2011.
The agency, however, did not specify if Raghbeer had passed on money to somebody in the government but an officer, who didn’t want to be named, said “this bribery angle is being investigated”.
The agency says that as part of this criminal conspiracy, “Mayaram had provided undue favour to De La Rue by way of granting illegal extension which resulted in undue/wrongful gain to De La Rue International Ltd, UK, and corresponding loss to the government exchequer”.
Mayaram didn’t respond to HT’s calls and text messages. An email query sent to De La Rue remained unanswered till filing of this report.