Hawala Scam by Hassan Ali

Hasan Ali Khan (or Syed Mohammed Hassan Ali Khan^[1], son of late Gayasuddin Ali Khan^[2]) is a 53-year-old ^[3]alleged money-launderer^[4] based in India and allegedly worth USD 9 billion or more, according to law-authorities. This figure has been verified from a letter written by UBS (Zurich) to Khan. The Government of India has also confirmed the existence of this account in UBS, and ordered him to pay 50,000 crore (US$11.1 billion) in taxes on that wealth. However, according to Khan, he is a scrap dealer with an annual income of 30 lakh (US$66,600).^[5] Some sources claim that he might be the fourth richest person in India and amongst the world's dollar billionaires.^[6] However, he is not officially recognized as a billionaire by any publication because most of his money is in the form of unaccounted wealth or black money. This can be considered true because India tops the list for black money in the entire world with almost US$1456 billion in Swiss banks (USD 1.4 trillion approximately) in the form of black money.^[7] According to the data provided by the Swiss Banking Association Report (2006), India has more black money than the rest of the world combined.^[8][9] Indian Swiss bank account assets are worth 13 times the country’s national debt.^[10] In Swiss bank accounts, the account holder need not even give his or her name. Perhaps that explains why Hasan Ali Khan's name does not figure in any UBS accounts. Also, the account holder's name need not even appear in any of the official documents of the account.^[11]
The Enforcement Directorate, Income Tax department along with the Economic Offences Wing (EOW) of Maharashtra are probing the illegal investments and charges of money laundering against Khan.^[12] The Supreme Court of India (SC) questioned the Central Government’s inertia on this issue: “What the hell is going on in this country?^[13] There are instances when minor offenders are shot down for violating Section 144 CrPC, but you don't take any action against these people. We are very sorry. All these people are now free.^[14] What is in the way of taking action against Hasan Ali? How many years will investigations continue against Ali?” Despite this, the Central Government doesn't intend to prosecute Khan under India’s money laundering law simply because it hadn’t gone into effect at the time the alleged crimes were committed.^[15][16]
The Indian Income Tax tribunal also reportedly asked Ali to reply to their show-cause notice. Ali reportedly has not paid his tax evasion penalty worth 40,000 crore (US$8.88 billion). To put this amount in perspective, the government hopes to raise 359,990 crore (US$79.92 billion) in income tax from the whole country in 2011-12.^[17] Four immovable properties and some small assets of Khan have been attached. The total value of the assets seized would not be more than 7 crore (US$1.55 million). Khan recently paid income tax of only 10 lakh (US$22,200).^[18] The Indian income-tax department is going to impose a 200% penalty on Khan, seeking 210,000 crore (US$46.62 billion) - an amount which is 2.7% of India's entire GDP, and in a country where per capita income of an honest person does not usually exceed 52,920 (US$1,174.82).^[19]

Fodder scam

The Fodder Scam (Devanagari: चारा घोटाला, chārā ghoṭālā) was a corruption scandal that involved the alleged embezzlement of about 950 crore (US$ 215.65 million) from the government treasury of the eastern Indian state of Bihar.^[1] The alleged theft spanned many years, was engaged in by many Bihar state government administrative and elected officials across multiple administrations (run by opposing political parties), and involved the fabrication of "vast herds of fictitious livestock" for which fodder, medicines and animal husbandry equipment was supposedly procured.^[1][2] Although the scandal broke in 1996, the theft had been in progress, and increasing in size, for over two decades.^[3] Besides its magnitude and the duration for which it was said to have existed, the scam was and continues to be covered in Indian media due to the extensive nexus between tenured bureaucrats, elected politicians and businesspeople that it revealed,^[4] and as an example of the mafia raj that has penetrated several state-run economic sectors in the country.

The scam was said to have its origins in small-scale embezzlement by some government employees submitting false expense reports, which grew in magnitude and drew additional elements, such as politicians and businesses, over time, until a full-fledged mafia had formed.^[4] Jagannath Mishra, who served his first stint as the chief minister of Bihar in the mid-1970s, was the earliest chief minister to be accused of knowing involvement in the scam.^[5]

In February 1985, the then Comptroller and Auditor General of India, T.N. Chaturvedi, took notice of delayed monthly account submissions by the Bihar state treasury and departments and wrote to the then Bihar chief minister, Chandrashekhar Singh, warning him that this could be indicative of temporary embezzlement.^[6] This initiated a continuous chain of closer scrutiny and warnings by Principal Accountant Generals (PAGs) and CAGs to the Bihar government across the tenures of multiple chief ministers (cutting across party affiliations), but the warnings were ignored in a manner that was suggestive of a pattern by extremely senior political and bureaucratic officials in the Bihar government.^[7] In 1992, Bidhu Bhushan Dvivedi, a police inspector with the state's anti-corruption vigilance unit submitted a report outlining the fodder scam and likely involvement at the chief ministerial level to the director general of the same vigilance unit, G. Narayan.^[8][9] In alleged reprisal, Dvivedi was transferred out of the vigilance unit to a different branch of the administration, and then suspended from his position. He was later to be a witness as corruption cases relating to the scam went to trial, and reinstated by order of the Jharkhand High Court.

Indian Stock market scam

Harshad Mehta an Indian stockbroker and is alleged to have engineered the rise in the BSE stock exchange in the year 1992. Exploiting several loopholes in the banking system, Harshad and his associates siphoned off funds from inter-bank transactions and bought shares heavily at a premium across many segments, triggering a rise in the Sensex. When the scheme was exposed, the banks started demanding the money back, causing the collapse. He was later charged with 72 criminal offenses and more than 600 civil action suits were filed against him. He died in 2002 with many litigations still pending against him.

Mehta gradually rose to become a stock broker on the Bombay Stock Exchange and lived almost like a movie star in a 15,000 square feet (1,400 m²) apartment, which had a swimming pool as well as a golf patch. He also had a taste for flashy cars, which ultimately led to his downfall. The year was 1990. Years had gone by and the driving ambitions of a young man in the faceless crowd had been realised. Harshad Mehta was making waves in the stock market. He had been buying shares heavily since the beginning of 1990. The shares which attracted attention were those of Associated Cement Company (ACC). The price of ACC was bid up to Rs 10,000. For those who asked, Mehta had the replacement cost theory as an explanation. The theory basically argues that old companies should be valued on the basis of the amount of money which would be required to create another such company.

Through the second half of 1991, Mehta was the darling of the business media and earned the sobriquet of the ‘Big Bull’, who was said to have started the bull run. But, where was Mehta getting his endless supply of money from? Nobody had a clue.

On April 23, 1992, journalist Sucheta Dalal in a column in The Times of India, exposed the dubious ways of Harshad Metha. The broker was dipping illegally into the banking system to finance his buying.

The authors explain: “The crucial mechanism through which the scam was effected was the ready forward (RF) deal. The RF is in essence a secured short-term (typically 15-day) loan from one bank to another. Crudely put, the bank lends against government securities just as a pawnbroker lends against jeweller. The borrowing bank actually sells the securities to the lending bank and buys them back at the end of the period of the loan, typically at a slightly higher price.”

It was this ready forward deal that Harshad Mehta and his cronies used with great success to channel money from the banking system.

A typical ready forward deal involved two banks brought together by a broker in lieu of a commission. The broker handles neither the cash nor the securities, though that wasn’t the case in the lead-up to the scam.

“In this settlement process, deliveries of securities and payments were made through the broker. That is, the seller handed over the securities to the broker, who passed them to the buyer, while the buyer gave the cheque to the broker, who then made the payment to the seller.

In this settlement process, the buyer and the seller might not even know whom they had traded with, either being known only to the broker.”

This the brokers could manage primarily because by now they had become market makers and had started trading on their account. To keep up a semblance of legality, they pretended to be undertaking the transactions on behalf of a bank.

Another instrument used in a big way was the bank receipt (BR). In a ready forward deal, securities were not moved back and forth in actuality. Instead, the borrower, i.e. the seller of securities, gave the buyer of the securities a BR.

As the authors write, a BR “confirms the sale of securities. It acts as a receipt for the money received by the selling bank. Hence the name - bank receipt. It promises to deliver the securities to the buyer. It also states that in the mean time, the seller holds the securities in trust of the buyer.”

Having figured this out, Mehta needed banks, which issue fake BRs, or BRs not backed by any government securities. “Two small and little known banks - the Bank of Karad (BOK) and the Metropolitan Co-operative Bank (MCB) - came in handy for this purpose. These banks were willing to issue BRs as and when required, for a fee,” the authors point out.

Once these fake BRs were issued, they were passed on to other banks and the banks in turn gave money to Mehta, obviously assuming that they were lending against government securities when this was not really the case. This money was used to drive up the prices of stocks in the stock market. When time came to return the money, the shares were sold for a profit and the BR was retired. The money due to the bank was returned.

The game went on as long as the stock prices kept going up, and no one had a clue about Mehta’s modus operandi. Once the scam was exposed though, a lot of banks were left holding BRs which did not have any value - the banking system had been swindled of a whopping Rs 4,000 crore. When the scam was finally revealed, the Chairman of the Vijaya Bank committed suicide by jumping from the office roof because he knew that if people come to know about his involvement in issuing cheques to Harshad Mehta, people would accuse him.

Mehta made a brief comeback as a stock market guru, giving tips on his own website as well as a weekly newspaper column. This time around, he was in cahoots with owners of a few companies and recommended only those shares. This game, too, did not last long.^[1]

Interestingly, by the time he died, Mehta had been convicted in only one of the many cases filed against him.

Till now, the real story behind the entire scam is unknown. The recent Hindi movie 'Gafla' showed this scam in a different perspective.^[2]

Indian Matchfixing scandal

Uncovering a scandal

The report of the Central Bureau of Investigation uncovers the seamy underside of cricketing in the Indian subcontinent, but doubts remain on whether the agency has gotten to the bottom of the whole affair.

SUKUMAR MURALIDHARAN
in New Delhi

UNION Minister for Sports Sukhdev Singh Dhindsa clearly was disinclined to brood for long over the report of the Central Bureau of Investigation (CBI) on the cricket match-fixing scandal. Since the first eruptions in April 2000, Dhindsa has displayed a p erfectly appropriate sense of urgency about uncovering the true dimensions of the malaise afflicting cricket. With the concurrence of Prime Minister A.B. Vajpayee, he quickly moved to release the report to the public on November 1, wryly remarking at the media conference called for the purpose, that certain sections of the press evidently knew more about its contents than he himself did. A few days later, Dhindsa held a conclave with A.C. Muthiah, president of the Board of Control for Cricket in India ( BCCI). The outcome was a directive from the BCCI that Mohammad Azharuddin, Ajay Jadeja, Nayan Mongia, Ajay Sharma and Manoj Prabhakar, the five Indian cricketers named for culpability, be omitted from consideration at any level of competition until furth er inquiries were completed.

The reactions of the players who had been booked traversed a wide range. After having worn the badge of honour as national team captain for longer than any other cricketer, Mohammad Azharuddin withdrew into the seclusion of his home in Hyderabad. Ajay Sh arma, who is by mutual admission before the CBI, a close friend of Azharuddin's, was similarly unavailable for comment.

N. SRIDHARAN
Mohammad Azharuddin

Ajay Jadeja lapsed into a sullen but brief silence. When he emerged from his cocoon, his usual cheery ebullience was replaced by an ashen-faced impassivity. But somehow his effort to rebut all the evidence that had been gathered against him and challenge the CBI to provide more specific information, failed to carry much conviction.

Nayan Mongia pleaded that he was the victim of gross injustice. The nature of the evidence against him was so weak that time would vindicate his honour, he claimed. And Manoj Prabhakar reacted in anger, claiming that he was implicated only in order to pr otect others more influential in the cricketing world. The CBI report, he claimed, reflected little more than a fraction of all the information that he had proffered before the investigation.

This range of reactions was appropriate, since the CBI essentially relied upon the admissions of guilt of Azharuddin and Ajay Sharma to build its case. These two were, by all accounts, induced to throw overboard their early claims of complete innocence, by the testimony provided by a group of bookmakers. The basis for the CBI's conclusions is constituted by the testimony recorded from 19 luminaries of the betting business - variously described as bookmakers and punters. This has in turn been matched wit h the evidence given by 14 cricketers and five officials who were associated with the game through the 1990s. Supplementary information has been provided by telephone records, principally of cellular phone calls made by the principal suspects, which test ify to their close interactions at critical moments in the execution of the match-fixing stratagems.

Ajay Jadeja

THE report submitted by the CBI has set off waves of anxiety all over the cricketing world. Apart from the five Indian cricketers named and of course the hapless former South African captain Hansie Cronje, there are unsavoury accounts of the involvement of at least nine high-profile cricketers of the last decade. Players no less illustrious than Arjuna Ranatunga and Aravinda D'Silva of Sri Lanka, Brian Lara of the West Indies, Martin Crowe of New Zealand, Dean Jones and Mark Waugh of Australia, Salim Ma lik of Pakistan and Alec Stewart of England are now suspected of involvement in a global enterprise directed from India. With the exception of the Australians, all the overseas cricketers named have worn the mantle of national team captain at various poi nts in the 1990s. And of them, Salim Malik alone has so far been brought to book for his role in the scandal. When all the big names of the game are exhausted there are a few of the minnows who feature in auxiliary roles - prominent among them being Ali Irani, for long the physiotherapist of the Indian team, whose role it transpires, extended to being the courier and conduit for Azharuddin's monetary transactions.

Although the overseas players have without exception reacted with stout denials, there is little question that long-festering wounds have been further inflamed by the CBI report. With so much that was once the subject of whispered conversation now confir med, there is perhaps a glimmer of hope that the healing process can begin. How durable this repair job would be, naturally hinges on how complete a job the CBI has done. Has it really got to the core of the problem of corruption in sport or is it still operating at the periphery?

Match-fixing as an offence is by its very nature extremely slippery, rendering it difficult for an investigation to make any headway without the cooperation of all the actors. And the experience of the CBI in this respect has not been a happy one. It rec ords how at every stage in its inquiry, it had to face a "conspiracy of silence" in the cricketing fraternity, which includes both players past and present and officials. It took the CBI much labour to assemble various shreds of evidence into a coherent body of information which could be used to confront recalcitrant witnesses. At different stages in this process of attrition, the CBI records, some of the players and bookmakers "broke down and disclosed their involvement in the malpractices in various d egrees".

V.V. KRISHNAN
Manoj Prabhakar

By all accounts, a key breakthrough was the interrogation of Mukesh Gupta, alias "M.K.", alias "John"- a truly Protean character whose deposition constitutes close to a fifth of the CBI's published testimonies. Since being named in Hansie Cronje's testim ony before the Edwin King Commission of Inquiry in South Africa, Mukesh Gupta had slipped out of sight (Frontline, July 7, 2000). Some pressure from the CBI on his family did the trick. A contrite Mukesh Gupta turned up at the doorstep of the agen cy late in June to make a full disclosure.

Mukesh Gupta's entry into the world of cricket was facilitated by an effusive gesture of goodwill towards Ajay Sharma. Seemingly overwhelmed by a sterling display by the player in a 1988 club match in Delhi, Mukesh Gupta tucked a gift of Rs.2,000 into hi s hands, assuring Ajay Sharma that he would be available in case he faced "any problem in life". Just over a fortnight later, Ajay Sharma re-established contact and the nexus was cemented. Manoj Prabhakar was brought into the charmed circle during an Ind ian tour of New Zealand in 1990, providing Mukesh Gupta with the means to expand his horizons in a manner that Ajay Sharma could not afford.

Through Prabhakar's intercession, Mukesh Gupta established connections with Ranatunga, D'Silva, Malik and Crowe in quick time. Lara and Stewart and the two Australians were brought on board a couple of years later. Some of these players were willing to p rovide "information" on match conditions, team selection and morale, but demurred at the prospect of actually manipulating match outcomes. Other players, if Mukesh Gupta's testimony is to be believed, such as Lara, Ranatunga, D'Silva and Malik actually d elivered results of convenience for the Delhi-based bookmaker.

V.V. KRISHNAN
Nayan Mongia

By the mid-1990s according to Mukesh Gupta, his entanglement with Prabhakar had begun to sour because of the latter's continuing friendship with an estranged associate. At this point, Ajay Sharma renewed his contact, with a request for a trifling loan of Rs.15,000 to meet the black market premium on a car. In a reciprocal gesture, Ajay Sharma introduced Mukesh Gupta (or "M.K.") to Azharuddin. The payoffs involved for the two players were, according to Mukesh Gupta, proportionate to their relative statur e in the national cricketing scene. Ajay Sharma was given Rs.5 lakhs, while Azharuddin pocketed Rs.50 lakhs for his promise that he would endeavour to "do" a few matches for Mukesh Gupta's benefit. The introduction to Cronje then followed under Azharuddi n's auspices, during the Kanpur Test between India and South Africa in 1996.

If Cronje's testimony before the King Commission is to be believed, his first encounter with the seamy underside of cricket match-fixing came in 1995, when he was going out with Pakistan captain Salim Malik to take the toss for the final of the Mandela t rophy in Capetown. Capitalising on the privacy of the moment, Malik asked Cronje whether he had been contacted by "John" the previous day to arrive at a mutually acceptable deal on the outcome of the match. Cronje admitted to having been approached by "J ohn" - incidentally the same sobriquet used by the Indian bookie who paid off the Australians Mark Waugh and Shane Warne in 1994, supposedly for providing information about pitch conditions - but he refused to go any further in the match-fixing venture.

If "M.K." and "John" are different identities used by Mukesh Gupta, as the CBI report clearly implies, then Cronje probably had been contacted by him even before Azharuddin effected his introduction. But perhaps Azharuddin's later sponsorship of Mukesh G upta's overtures was important, since that is what finally persuaded Cronje that he could with impunity partake of the forbidden fruit. And from then on, if Cronje's testimony before the King Commission is any indication, he just could not have enough of it.

N. SRIDHARAN
Ajay Sharma

Ajay Sharma was instrumental in bringing Ajay Jadeja into the match-fixing circuit, according to the CBI's inquiries. But Jadeja clearly had a multiplicity of options in purveying his trade. One of his key contacts was a bookmaker from Chennai, Uttam Cha nd Jain alias "Topi". At key moments in India's international cricketing encounters in 1999 and 2000, the CBI has discovered, Jain was prone to contact Jadeja repeatedly over cellular telephone. Jain's explanation was that he was merely seeking informati on that would be of use in placing his substantial bets. Jadeja's rather disingenuous plea is that he was a victim of cricketing superstition and believed that speaking to Jain would bring him good luck. The CBI's own conclusion is that Jadeja provided i nformation for a monetary consideration - some of it received through hawala channels. And the provision of information, the investigation has concluded, is a practice that could quite as easily slip into an effort to rig the outcome of a match.

Nayan Mongia has been booked for his suspicious conduct during a one-day cricketing encounter with the West Indies. Although India was in with a positive chance to force a win when he went into bat, Mongia, in league with Prabhakar, seemed more intereste d in parading his defensive batting abilities. Mongia has pleaded that he was only following instructions from his team management, though his subsequent omission from the side proves that he was perhaps acting with hidden motives of his own.

In his partial disclosures, Azharuddin has conceded that he did "do" a few matches for Mukesh Gupta in association with Jadeja and Mongia. But as in all such associations, his links with "M.K." were fraught with frequent eruptions of discord. A key incid ent was the final of the 1996 Titan Cup in Mumbai, which India won reversing a string of six consecutive defeats against South Africa. "M.K." reportedly suffered a massive loss on this outcome and insisted on appropriate redress from Azharuddin. Accordin g to the concurring depositions of "M.K." and Ajay Sharma, an assurance of appropriate redress was given by Azharuddin and in fact delivered in a Test series against South Africa that followed.

R.V. MOORTHY
Union Sports Minister Sukhdev Singh Dhindsa (right) with president of the Board of Control for Cricket in India A.C. Muthiah in New Delhi on November 3.

The CBI report indicates that "M.K." was not Azharuddin's only recourse. By the late-1990s, he had established a mutually rewarding association with another network of bookmakers in Delhi - Ajay Gupta, Gyan Chand Gupta and Nishit Goel. Azharuddin admitte d to having "done" a match for this troika in 1999, and to having received funds from Ajay Gupta for a shopping expedition in London during the 1999 World Cup. Ajay Sharma, in turn, appears to have been a key intermediary in establishing this nexus.

FOR all its efforts, it is probable that the CBI has only partially uncovered the dimensions of the cricket racket. Since it has had to rely almost exclusively on the confessions of the guilty, the strategy of obdurate denial could have obscured much wro ngdoing. This approach stands in marked contrast to that adopted by Justice Mallik Abdul Qayyum in Pakistan. Confronted with the same conundrum, Justice Qayyum had adopted an analytical approach of his own, studying the course of various matches and thei r outcomes, and correlating these with the performance of key players who were under suspicion.

Certain other locutions in the CBI report indicate that the agency's effort is as yet incomplete. On page six, for instance, it observes that, "Bombay took the lead in this racket since the 'odds' on which bets were placed in any match throughout India w as determined by the bookies based in Bombay". Further, it observes that "currently also Bombay remains the base around which all betting operations in India revolve".

In relation to this fairly categorical assertion, the list of suspects examined is revealing: five of the eight bookmakers interrogated are from Delhi, two from Mumbai and one from Chennai. Of the "punters" who have come under scrutiny, all nine are from Delhi. In this sense, the report fails to bear out the CBI's own assessment that Mumbai was the nerve-centre of the match-fixing operations. There are, however, ominous warnings that the Mumbai underworld, with all its global connections, could be invol ved in the cricket racket. The report says: "The underworld mafia has started taking interest in the betting racket and can be expected to take overall control of this activity, if not checked immediately with a firm hand."

Some of the CBI's most severe strictures are reserved for the BCCI, attracting murmurs of dissent from cricket officials. As of now, however, public sympathies seem loaded against the BCCI. Its actions since the scandal erupted have failed to carry the f aintest hint of sincerity or seriousness. Apart from certain questionable decisions on the award of telecast rights to major cricket tournaments, the BCCI will also have to account for its active advocacy of Azharuddin's cause, despite evidence over the years that his presence in the team - whether as player or captain - was becoming increasingly dysfunctional. Two individuals in particular would seem to have much to explain - Raj Singh Dungarpur, who held the pivotal positions of chairman of the nation al selection board and BCCI president at various times in the 1990s, and Jaywant Lele, who continues to be BCCI secretary.

The dubious role of the BCCI effectively limits its power to impose sanctions against the players who have been in breach of public trust. Measures being contemplated by the government include the revocation of all national awards that have been conferre d on the cricketers - ironically enough, four of the five offenders are recipients of the highest sporting honour, the Arjuna award. The BCCI in turn, has made it known that it could consider lifetime bans and even the effacement of the career records of all the offending players. These may seem rather more severe penalties than even a term in jail. But the provisions of the law, determined in turn by an act on gambling that is over a century old, seems totally inadequate to cover the offences involved in the cricket scandal. Effectively and in some observers' view, regrettably this leaves the BCCI as the only body that can possibly initiate corrective measures to check the rot in cricket. How credible it will be in the bargain though, is quite another question.

Bofors scam

The Bofors scandal was a major corruption scandal in India in the 1980s; the then Prime Minister Rajiv Gandhi and several others were accused of receiving kickbacks from Bofors AB for winning a bid to supply India's 155 mm field howitzer. The scale of the corruption was far worse than any that India had seen before, and directly led to the defeat of Gandhi's ruling Indian National Congress party in the November 1989 general elections. It has been speculated that the scale of the scandal was to the tune of Rs. 400 million.^[1] The case came to light during Vishwanath Pratap Singh's tenure as defence minister, and was revealed through investigative journalism by Chitra Subramaniam and N. Ram of the newspapers the Indian Express and The Hindu.^[2]

Ottavio Quattrocchi was accused as the middleman in the scandal because of his intimacy with Rajiv and his Italian-born wife Sonia Gandhi. Magazine cover from India Today

The name of the middleman associated with the scandal was Ottavio Quattrocchi, an Italian businessman who represented the petrochemicals firm Snamprogetti. Quattrocchi was reportedly close to the family of Prime Minister Rajiv Gandhi and emerged as a powerful broker in the 1980s between big businesses and the Indian government. Even while the case was being investigated, Rajiv Gandhi was assassinated on May 21, 1991 for an unrelated cause. In 1997, the Swiss banks released some 500 documents after years of legal and the Central Bureau of Investigation (CBI) filed a case against Quattrocchi, Win Chadha, also naming Rajiv Gandhi, the defence secretary S. K. Bhatnagar and a number of others.^[3] In the meantime, Win Chadha also died.^[4]

Meanwhile February 5, 2004 the Delhi High Court quashed the charges of bribery against Rajiv Gandhi and others,^[5] but the case is still being tried on charges of cheating, causing wrongful loss to the Government, etc. On May 31, 2005, the High court of Delhi dismissed the Bofors case allegations against the British business brothers, Shrichand, Gopichand and Prakash Hinduja.^[6]

In December 2005, the Mr B. Datta, the additional solicitor general of India, acting on behalf of the Indian Government and the CBI, requested the British Government that two British bank accounts of Ottavio Quattrocchi be de-frozen on the grounds of insufficient evidence to link these accounts to the Bofors payoff. The two accounts, containing € 3 million and $1 million, had been frozen in 2003 by a high court order by request of the Indian government (when the (now) opposition Bharatiya Janata Party (BJP) was in power). On January 16, the Indian Supreme Court directed the Indian government to ensure that Ottavio Quattrocchi did not withdraw money from the two bank accounts in London. The CBI, the Indian federal law enforcement agency, on January 23, 2006 admitted that roughly Rs 21 crore, about USD $4.6 million, in the two accounts have already been withdrawn. The British Government released the funds based on a request by the Indian Government.^[7]

However, on January 16, 2006, CBI claimed in an affidavit filed before the Supreme court that they were still pursuing extradition orders for Ottavio Quattrocchi. The Interpol, at the request of the CBI, has a long standing red corner notice to arrest Quattrocchi.^[8] Quattrocchi was detained in Argentina on 6 February 2007, but the news of his detention was released by the CBI only on 23 February. Quattrocchi has been released by Argentinian police. However, his passport has been impounded and he is not allowed to leave the country.^[9]

However, as there was no extradition treaty between India and Argentina, this case was presented in the Argentine Supreme Court. The government of India lost the extradition case as the government of India did not provide a key court order which was the basis of Quattrochi's arrest. In the aftermath, the government did not appeal this decision owing delays in securing an official English translation of the court's decision.^[10]

The Italian businessman no longer figures in the CBI's list of wanted persons and the 12-year Interpol red corner notice against the lone surviving suspect in the Bofors payoff case has been withdrawn from the agency’s website after the CBI’s appeal.^[11]

Satyam scam

New Delhi/Hyderabad: The Serious Fraud Investigation Office will probe also Maytas infrastructure as part of the Satyam financial scam probe.

Corporate affairs minister P C Gupta said on Monday evening that initial investigations suggest a clear nexus between Satyam, Maytas properties and Maytas infrastructure

Earlier, the Andhra High Court dismissed Ramalinga Raju's revision petition against his police custody. But SEBI still did not get to question Raju on Monday as a court order on the body's petition to question him was postponed till January 22.

Meanwhile the CID is questioning the Raju brothers and former Satyam CFO Vadlamani Srinivas .

They are also looking into their e-mails and phone records over the last one month.

Meanwhile, Andhra chief minister Y S R Reddy reiterated his government did not flout any rule in awarding the Hyderabad metro rail project to Maytas.

But how deep and how wide is the rot inside India's fourth largest software company?

Sources tell CNN-IBN the company is facing serious money crunch, and needs Rs 1,110 crore to tide over the crisis and Rs 500 crore to pay the January salary to employees.

Meanwhile a search is also on for a new CEO for the embattled IT firm. Network-18 learns that the board is looking at a 10-day time period to pick someone to head the company. Over 40 applications have come in so far.

There is now also a question mark on the number of employees Satyam has. It is reported that Satyam has 53,000 employees.

How they did it

Investigators are now reportedly coming across evidence of insider trading by the promoters even before the scandal broke.

The big takeaway from the Registrar of Companies report is that the top management of Satyam - the directors and senior officials - sold shares ahead of the Big Bang revelation by Raju.

The reports say Satyam books have been overstated by Rs 5,000 to Rs 6,000 crore, leading to an inflated stock price that helped the top management make money.

Who sold what?

Raju has claimed that no one else in the company was privy to the fudging of accounts. But exclusive information with CNN-IBN suggests insider trading.

BSE figures show a number of senior people in the company, including Raju and CFO Vadlamani were reportedly selling Satyam's shares over the last 22 quarters.

In June 2001, Raju had nearly 23 per cent shares. By December that year, his share was down to 22.4 per cent.

In September 2002, it fell to 21.6 per cent which fell a year later to just over 19 per cent.

In 2004, Raju's holding was 16 per cent which fell to 14 per cent in 2005, 11 per cent in 2006. In 2007 it was in single digit.

By September 2008 Raju's share was just 8.27 per cent.

BSE figure also show Vadlamani sold 92,538 shares while the then CEO Ram Mynampati sold 700,000 shares plus 2,50,000 ADRs.

Apart from these, other senior officials also reportedly sold large number of shares. Sources say they include one Kiran Cavale who reportedly sold 400,000 shares and 10,000 ADRs and one Rajan Nagarajan who reportedly sold 430,000 shares and 70,000 ADRs.

Common wealth games scam

A major scam hit the Commonwealth Games on Friday with allegations being made that a substantial sum of money was transferred to a little known U.K. company from the Games Organising Committee (OC) about which the British government has raised questions.

Television channels reported that over £ 4.50 lakh were transferred through a British bank to the A M Films company, said to be a one man show and which was also receiving £ 25,000 a month.

‘Times Now' quoted documents to show that the entire deal came to light when the OC asked for a VAT refund of £ 14,000 in March this year for the payments made to the British company.

The channel quoted a letter of the British Revenue and Customs Department to the Indian High Commission stating that there was no written contract between the CWG and A M Films and that no tendering procedure had been followed and there was no paper work regarding the contract.

The OC is reported to have made a payment of nearly £2.5 lakh for video equipment purchase while A M Films had claimed that it provided services of car hire, makeshift toilets, barriers and electricity.

Indian High Commission sources said the information provided by the U.K. authorities had been forwarded to the Sports Ministry for follow-up action.

“The U.K. authorities had referred some matter regarding A M Films to us. We passed on the information to the Indian government. The matter is now with the Indian government,” the sources told PTI.

In Delhi, Cabinet Secretary K.M. Chandrashekhar has conveyed concern over the charges as well as delay in preparations to the OC of the mega sporting event in October this year.

Mr. Chandrashekhar held a review meeting on Friday. It was attended by secretaries of agencies concerned, including officials of the OC, and Ministries of Youth and Sports, Urban Development, and Tourism.

His remarks come close on the heels of the Central Vigilance Commission asking its officers to re-examine all the tenders and procurement process related to the projects.

ED probing the matter

Enforcement Directorate sources in Delhi said the agency was probing the issue.

The company was involved in the arrangements for the Queen's Baton Relay when it started its journey from London with a function outside the Buckingham Palace.

Late in the night, the OC refuted the allegations about financial irregularities with relation to the launch of the QBR in London on October 29 last year.

“We must point out that we have not received any official communication in this regard,” it said in a statement.

“We have cleared all the payments in October itself. We asked for the VAT refund and we got it” OC Secretary General Lalit Bhanot, who dismissed the allegations of financial irregularities, said.

“There is no money laundering and no manipulation. Whatever payment made has been done officially and all transactions are transparent,” he told Times Now.

The British authorities have sought to know details of how A M Films which supplied cars for rentals was involved in supply of video equipment and providing consultancy for costume designing.