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CBI files case against former finance secy for irregularities
The agency carried out raids on Thursday at a few places including Mayaram’s residences in Jaipur and Delhi in the matter, people familiar with the development said on Thursday.
The Central Bureau of Investigation (CBI) has filed a corruption case against former union finance secretary Arvind Mayaram, British currency 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 currency, people familiar with the development said on Thursday.
The agency carried out raids on Thursday at a few places including Mayaram’s residences in Jaipur and Delhi in the matter, they said.
The federal agency 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 back, the agency concluded that allegations against Mayaram were serious enough to formally charge him in the case after which it sought prior sanction under section 17A of the Prevention of Corruption (PC) Act from the ministry of finance, and finally registered an FIR on Tuesday.
The agency booked Mayaram, a 1978 batch retired IAS officer of Rajasthan cadre, De La Rue and unknown officials for criminal conspiracy, cheating and sections pertaining to criminal misconduct and undue benefit under PC act.
According to the FIR, a copy of which has been 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 there in every bank note) for Indian currency in 2004 for a period of five years.
The contract agreement, CBI says, was subsequently “extended four times” till December 31, 2015.
The former union finance minister on July 17, 2004, authorised RBI to enter into an exclusivity agreement with the suppliers of exclusive security feature on behalf of Indian government, the CBI FIR states. P Chidambaram was the finance minister then.
Thereafter, a sub-committee headed by P K Biswas, then executive director, RBI, was constituted to go through all aspects of exclusivity of the three security features firmed up for Indian currency, and also to go into the details of prices, the FIR added.
“The exclusivity agreement was signed by RBI with De La Rue on September 4, 2004. 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 for use in Indian banknote paper and for which De La Rue holds exclusive manufacturing rights’,” the FIR said.
De La Rue, the CBI FIR claims, “made false claims of holding patents 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 the 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,” added the CBI FIR.
Besides, despite non possession of patent, contract agreement with the British company was extended from time to time till December 31, 2012, CBI said.
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-year 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,” the CBI FIR added.
The agency claims that Anil Raghbeer, signatory of the contract agreement from De La Rue, received ₹8.2 crore from offshore entities apart from remuneration paid by De La Rue in 2011.
The agency, however, specified if Raghbeer had passed on money to somebody in the government; a CBI officer, who didn’t want to be named, said “this bribery angle is being investigated”.
The agency claimed that as part of this criminal conspiracy, “Mayaram 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 seeking comment. An email query sent to De La Rue remained unanswered till the filing of this report.
