An Open Investigation: The rotten apple of Congress
PR Ramesh | 06 Apr, 2017
In ancient times, apples were known as the fruit of the underworld, sustenance for those who would venture into deep, dark recesses from where there was no return. Virbhadra Singh, Chief Minister of Himachal Pradesh, the 82-year-old Congress stalwart who has been sworn in for the state’s top political post five times before and bears ‘Raja’ as a title for his royal lineage from the erstwhile princely state of Rampur Bushahr, apparently paid no heed to that bit of folklore as he allegedly cooked his account books in an apple stew of fraudulent figures that could now result in his fall.
According to legend, Rampur Bushahr was founded by Lord Krishna’s son Pradhyumna, though the latter-day historian CF Kennedy traced its establishment to a Rajput warrior from the Deccan, Rana Danbar Singh, in 1412. Either way, it is among the oldest hill kingdoms of the Himalayas. The apple made its debut only during the British Raj—in 1870, when Captain RC Lee of the British army reportedly planted an apple tree in Kullu valley. Of the Newton Pippin variety, these proved too tangy for sweet-toothed locals, and it wasn’t till Samuel Evans ‘Satyanand’ Stokes introduced the Red and Golden Delicious kind to the hills in the early 20th century that Himachali apples achieved their fame. These come from Kotgarh, west of Rampur Bushahr. Having inherited its gaddi from Raja Padam Singh after Independence, Virbhadra Singh later acquired an apple orchard in the Shimla area. It would enrich him even as his Congress career got going during the Indira era, but not as much as his acquisition of power would, as the CBI chargesheet filed against him implies.
On April 3rd, 2017, the Enforcement Directorate (ED) seized a farmhouse in Delhi’s Dera Mandi village of Mehrauli that belonged to Maple Destinations and Dreambuilt Pvt Ltd, a company owned by Singh’s son Vikramaditya. The ED’s move, made under the Prevention of Money Laundering Act (PMLA), led to disquiet within the Congress party, which is in the thick of preparations for Assembly elections in Himachal Pradesh under Singh, but should not have been a shock. The Raja of Rampur Bushahr has been under the CBI scanner for amassing assets disproportionate to his legal sources of income since 2015, even if the investigative agency has officially made specific charges against him—and his wife, among others—only now after piecing multiple pieces of the jigsaw together. These are serious. Under the forgery section of the Indian Penal Code, for example, it could mean a life term in prison for fudging documents. Money laundering attracts a stiff penalty as well. These have cast a long shadow not only on Singh’s reputation, but also on Congress chances at the state polls due by year-end.
The Raja in his Himachali topi has been the party’s top Himachali leader for generations now, his name almost synonymous with the party’s in hill villages. He won his first Lok Sabha seat in 1962, won again in 1967, 1971 and 1980, was picked by Indira Gandhi as the state’s Chief Minister in 1983, and has alternated between key positions in Shimla and Delhi, with the Steel Ministry placed under his charge at the Centre by UPA-II in mid-2009.
Singh and his wife Pratibha have sought judicial intervention earlier in the disproportionate assets case, but the Delhi High Court has refused to entertain Singh’s plea that the FIR against them be cancelled. That a sitting Chief Minister should have had his assets attached by the ED is part of the process. In May 2016, the Directorate had seized Singh’s two-storey apartment in South Delhi’s Greater Kailash I locality, worth around Rs 8 crore. A provisional order under the PMLA also allowed the seizure of a clutch of LIC policies and fixed deposits in banks. At the time, the ED termed these the ‘proceeds of crime’—namely, money laundering. The action was based on a probe of the possibility that Singh had acquired these assets with funds unaccounted for.
Virbhadra Singh has been under the CBI scanner since 2015, even if the agency has officially made specific charges against him only now after piecing multiple pieces of the jigsaw together
The couple were questioned over the allegations in August 2016, but the Chief Minister tried to play the sympathy card in politics by claiming that the ED was acting against him at the behest of the Narendra Modi Government at the Centre even while letting off others with corruption charges against them, including Vasundhara Raje, Raman Singh and Shivraj Singh Chouhan, the BJP chief ministers of Rajasthan, Chhattisgarh and Madhya Pradesh, respectively. Investigators, however, detect a clear pattern of transactions that point to a series of illegal doings, with a set of accomplices involved in an elaborate frame of malfeasance.
Anand Chauhan features prominently in this trail of income in the guise of apple earnings, as uncovered by the CBI and Income Tax Department. The story begins at Singh’s Shrikhand orchard in Shimla district, whose ‘manager’ Chauhan has been found to have laundered funds to the tune of Rs 6.5 crore on behalf of the estate’s owner. For assessment years 2009-10, 2010-11 and 2011-12, Virbhadra Singh had filed Income Tax returns showing a total agricultural tax-exempt income of Rs 47.4 lakh. But a cash deposit of Rs 6.5 crore in the bank account of a modestly-earning LIC agent, Chauhan, drew the IT Department’s attention; on being questioned about the source of the money, he claimed these were the proceeds of apple sales from Singh’s Shrikhand orchard, of which he had been appointed caretaker (under an MoU).
In early 2012, Singh revised his agricultural income upwards for those three years to a figure of almost Rs 6.6 crore, a huge leap. During the probe, Singh could not demonstrate that this was money from apple sales. Officials found no evidence of any marketing fees paid to the government, as mandated. Also, the transportation details submitted by him for the commercial activity were found to be fake, especially a ridiculous claim that such a vast volume of fruit had been carried to an inoperative mandi by scooters and Maruti 800 cars.
THESE WERE CLEAR signs of a cover-up attempt. Proof of it emerged in the Memorandum of Understanding (MoU) between Singh and an apple dealer dated June 17th, 2008, which was found to be a fraudulent document. Made on non-judicial stamp paper acquired through a known network, it had been ante-dated and had the dealer promising to pay a vastly inflated sum for the orchard’s apples. According to ED officials investigating the case of Singh’s ‘golden’ apples, the bogus MoU was buttressed with forged registers and false entries. This trail led to a government printing press in Nashik, which, it transpired, had released stamp paper with the same serial number on September 24th, 2008, a whole three months after Singh signed the MoU with the apple merchant. Nor was that the end of the deceit perpetrated by Virbhadra Singh to ‘explain’ his earnings. On June 15th that year, he had signed an MoU with another apple supplier, again on the same kind of stamp paper. This time, the ED probe led it to a different person who had bought the paper and used it at the Shimla branch of Uco Bank. Documents accessed by the ED showed that the paper’s real buyer had used it on June 11th in Shimla, while Singh claimed use of the same on June 13th, 2008. This document, too, was a forgery.
Singh has quelled every instance of dissidence against him with such force that his writ within the state unit has been secure for a long time. This, despite a blow-hot blow-cold relationship with the party high command in Delhi
A communication dated November 1st, 2012, from the office of the Tehsildar of Khotkai, Shimla district, to the Additional Magistrate, L&O, Shimla, in response to queries from the latter states that the records maintained by the stamp vendor of Khotkai shows stamp papers numbered 1281 and 1282 issued on June 11th, 2008 in the name of Laik Ram of Kharail village and Jai Ram of Prem Nagar respectively. However, two non-judicial papers numbered 1284 and 1287 were issued to Anand Chauhan of Dhartu village, Tehsil Khotkai, on 11th and 12th June the same year. These had not been attested in June 2008 by the office, says the letter, which has a photocopy of the relevant records attached.
Further IT investigations revealed loopholes in Singh’s explanation of his sudden apple windfall in those three years. He claimed a bumper yield at Shrikhand, mainly due to ‘the benevolence of god.’ A colleague of mine in Himachal’s apple orchard business estimates that in a best-case scenario, Singh’s 105-bigha orchard of 3,200 trees could only have yielded 15,000 boxes of apples each year (at five boxes per tree), and after deducting farm expenses, all of it could only have given him earnings of Rs 15 lakh per annum. The IT Department’s officials on the case have based their estimates on the state’s Horticulture Department figures, by which the orchard could have earned Rs 64 lakh at best.
Singh, however, has claimed annual figures above a crore as his revised agricultural income in the period under question. Chauhan, an LIC agent, was being shown to have done stupendously better for his master as an orchard caretaker than the one he replaced, Bishambar Das. On March 2nd, 2012, Singh had revised the 2009-10 figure from Rs 7.35 lakh to Rs 2.21 crore; the 2010-11 number from Rs 15 lakh to Rs 2.80 crore; and his 2011-12 agricultural income from Rs 25 lakh to Rs 1.55 crore.
The IT Department did its job. It shot off a notice to Singh, seeking an explanation for this sudden jump in income from his orchard, and issued an assessment order on March 18th, 2014— for which both Singh and Chauhan were quizzed. With reliably sourced yield estimates in hand, the investigators posed this to the duo: from 105 bighas of orchard land in Shimla, at most 191 tonnes of apples could have been obtained in a year, the market realisation of which could not possibly have been anywhere close to the reported sums. How come? Chief Minister Virbhadra Singh’s game was up.
The information uncovered fits in with disclosures made in 2012 by Arun Jaitley in the Rajya Sabha, during the state’s last Assembly elections,to support charges of money laundering against Singh
Based on other findings thrown up by investigations, the CBI has also charged the stamp paper vendor Joginder Ghalta, apart from Prem Raj and Lavan Kumar Roach, witnesses to a forged MoU. The orchard’s ‘caretaker’, in the meantime, has been behind bars for the past ten months.
Singh’s problems did not end with a cooked-up apple bounty. On 26th September, 2015, while he and his family were about to attend the marriage ceremony of his youngest daughter Meenakshi Kumari with a member of Faridkot’s royal family, a posse of 18 IT officials descended unannounced on the Chief Minister’s Holly Lodge residence in Shimla.
Just days earlier, IT and ED officials in Faridabad and Shimla had coordinated efforts and shared information on the money laundering allegations against him. One such letter—marked ‘confidential’ and dated September 9th, 2015—was from Vinod Sharma, deputy director in charge of investigations at the IT Department in Faridabad, to the ED’s assistant director in Shimla. In response to a request for information, this letter had an update of the probe that enclosed detailed statements recorded of over half a dozen people, apart from affidavits filed by several others in connection with the case. States the letter: ‘If any additional information is required, you may personally visit and inspect the documents having implication for Prevention of Money Laundering Act.’
By late 2015, the dragnet had begun to close in. The ED formally registered a money laundering case against him, based on a criminal complaint filed by the CBI in September that year. That FIR had named Singh, his wife Pratibha Singh, LIC agent Chauhan, and his brother Chunni Lal Chauhan, levelling allegations under the Prevention of Corruption Act. The CBI had the task of probing the larger question of Singh’s graft while he was the Union Minister for Steel in the UPA-II Government. Authorities said they had ‘sufficient evidence’ to put the octogenarian Chief Minister behind bars.
Vakamulla Chandrashekhar is another significant accomplice, as alleged, and his role holds the key to the ‘source of funds’ aspect of the mystery of Singh’s money.
Promoter and director of the Tarini Group, a little-known business enterprise, he is the man who had paid for the Mehrauli farmhouse that has been attached by the ED. While its market value is estimated at Rs 27 crore, Chandershekhar purchased it— on official record—for a mere Rs 1.2 crore, a sum drawn from his personal bank accounts with Karur Vysya Bank, Kotak Mahindra Bank and ICICI Bank.
The businessman’s first big link with the Himachal government was established when his firm Venture Energies and Technology Ltd was awarded Chamba district’s 15MW Saikothi hydroelectric project. As Chief Minister, Singh cancelled this award in September 2004, but restored it in mid-2007. Several years later, various dots connected by investigators reveal that Chandrashekhar transferred Rs 5.9 crore to Singh’s family in assorted ways while the latter was Steel Minister. This was not the full extent of the man’s largesse: he also allotted them about 1 million shares in one of his companies. In 2013, the businessman got a crucial extension for his Saikothi project, and, according to the probe, he further paid Singh and his wife Pratibha Rs 1.8 crore in February that year; by this time, Singh was the state’s Chief Minister again and his wife was a Member of Parliament.
The Mehrauli farmhouse, which came later, was registered by Chandrashekhar in the name of Maple, a firm held by the Chief Minister’s son Vikramaditya Singh as a majority shareholder and daughter Aparajita Singh as a minority owner. During investigations, IT officials recorded the confession of Mr and Mrs Gadde, sellers of the farmhouse, saying that they had received sums of cash—in addition to the paltry land registry figure—running into crores from Chandrashekhar for the deal.
Sleuths discovered that the Tarini Group was in the business of laundering unaccounted-for cash through a network of dummy firms and fake-bill generators. One such entry operator was Ram Prakash Bhatia, owner of shell firms like Bharat Foods and Punjab Foods (found to have issued fake receipts for agri-produce), who has also been charged by the CBI with aiding the laundry operation.
Money was being funnelled to the Raja of Rampur Bushahr by multiple means. On June 9th, 2014, for example, Chandrashekhar held an IPO of Rs 16.8 crore for Tarini International, a group firm. Part of the proceeds were then transferred to Maple Destination, which was shown to be a ‘contractor’ for his business. Scrutiny by IT and ED officials, however, found no evidence of any contractual undertakings by Maple for Tarini. All they found was crores paid to Singh’s family firm without commensurate work having been done by it. All this suggests that the sums being transferred actually belonged to Singh, according to investigators.
AS HIMACHAL PRADESH heads for state polls later this year, the Congress party finds its political prospects in complete disarray. As the party’s strongman of the state, Singh has quelled every instance of dissidence against him with such force that his writ within the state unit has been secure for a long time. This, despite a blow-hot-blow- cold relationship with the party high command in Delhi that dates back to the early 1990s. After his last significant assertion of power vis-à-vis the central leadership of the Congress, in 2012—when he resigned his Parliament seat and threatened to quit all party posts— he had gone on to demonstrate his political value by leading the party in victory in that year’s state polls. This has also meant that challenges to the Raja’s authority within the party in Shimla have not been very voluble. This time, though, the Congress also faces anti-incumbency as a factor. Differences have lately arisen within the party—not just over the corruption charges, now more serious than ever, but also over unkept poll promises.
Back in September 2015, in the aftermath of the IT raids on Singh’s Holly Lodge residence, the party leadership at both state and Central level had rallied behind Singh. It was Himachal Transport Minister GS Bali who is believed to have alerted Singh two days before the event that the CBI was closing in on him. Soon after, the Congress Legislative Party of 36 MLAs had endorsed his leadership in unison. Even Anand Sharma, his intra-party rival and former Union minister, had backed him by signing a statement in support of Singh staying on as Chief Minister. That this was an instance of political persecution was a line that Congress leaders had taken then, and the show of unity had forestalled chances of a rebellion against him. He also used his image as a mass leader to barricade his position.
Much has changed since. Now, BJP calls for Singh to step down have acquired the tone of a moral imperative that the Congress top leadership cannot ignore without bearing the brunt of allegations that it shields the corrupt. For his part, Singh may have tried to convert his troubles into political capital by charging the Modi Government with singling him out as a political target, but it’s unclear whether this will wash any longer. In the past, he had also voiced apprehensions that the BJP was out to destabilise a Congress government, as with the case of Uttarakhand.
The Congress high command is staring at hard options. In March 2016, Singh had been summoned by party president Sonia Gandhi to discuss his ‘problem’. Although he appeared to be confident that he would see off the corruption cases against him and win Himachal for the party again, Gandhi was reportedly sceptical about his claims. Now that Singh is looking more and more like a political liability, some observers wonder if his departure is imminent.
It would entail risks for the party. Punjab and Karnataka are now the only two big states where the Congress has a government. In Punjab, the party has just returned to power after a decade, but in Karnataka, which is due for elections next year, the Siddaramaiah government would be hard pressed to stay on. The party was pinning its hopes on their top man in Himachal Pradesh, so this blow has been particularly hard.
In any case, finding a replacement for Singh would not be easy for the party. Anand Sharma is reckoned unlikely to be able to take on Prem Kumar Dhumal, should the BJP field him as its chief ministerial candidate, and other leaders such as the state’s Congress Commitee chief Sukhwinder Singh Sukhu lack the stature required.
If convicted under the PMLA, Chief Minister Virbhadra Singh could be looking at the end of his political career. Last year, he had announced that he would bestow his traditional seat on Vikramaditya, setting off speculation over whether he was thinking of contesting a different seat this year or retiring from electoral politics, an intention he had once aired and retracted soon after.
The information uncovered by investigators fits in with disclosures made in late 2012 by Arun Jaitley as leader of the opposition in the Rajya Sabha, during the state’s last Assembly elections, to support charges of money laundering against Singh. The case finally seems to be reaching its logical end. And it could drag not just the Raja but his party down with him.