Friday, November 27, 2020

GST officials reveal massive tax fraud of Rs 2,350 crore

The GST officials have arrested three persons – Sachin Bhoruka, Mahesh Kinger and Deepak Kumar Prajapati - involved in massive frauds of GST of over Rs 2350 cr.

Investigations revealed that Prajapati had set up an intricate web of over 22 firms that indulged in circular trading for the purpose of artificially inflating their turnover.

This is done to use Input Tax Credit (ITC) in the GST regime. Circular trading is a type of cycle that takes place when a company tries to create a flow of fake sales transactions with conspiring parties by producing fake invoices.

The GST Intelligence has spotted yet another case of fraud related to the utilization and passing on of ineligible ITC, with bogus invoices. 

Sachin Bhoruka, Director/Partner in various firms such as Erman Metals, Pioneer Trading, Marshal Multiventures, etc, was arrested for availing ITC amounting to Rs 485.64 cr and passing on fictitious ITC amounting to Rs 485.55 cr. Thus, the total quantum of the fraud committed involved GST amounting to Rs 971.19 cr.

In a parallel investigation, another person Mahesh Kinger, authorised signatory of Blue Sea Commodities and Director of Theme Lights was also found engaged in the fraudulent availment and utilization, as well as passing on of ineligible ITC on the basis of bogus invoices issued and received without actual supply of any goods or services. These entities had availed ineligible ITC amounting to Rs 580.23 cr and had passed on ineligible ITC amounting to Rs 579.76 cr. The total quantum of the fraud committed involved a GST of nearly Rs 1,159.99 cr.

Further, the GST officers arrested Deepak Kumar Prajapati, Director of Udyog Kiran Ltd. due to a similar fraud. The subsequent investigations revealed that Prajapati had set up an intricate web of over 22 firms that indulged in circular trading for the purpose of artificially inflating their turnover so as to avail higher bank loans and credit facilities. Based on the investigation conducted till date, it has been noticed that the firms operating Prajapati had passed on bogus ITC amounting to nearly Rs 126 cr, and have availed ITC amounting to R. 94 cr taking the total fraud amount to Rs. 220 cr.





Wednesday, November 25, 2020

The Govind Agarwal Story till Now

Police presume Govind Agarwal’s arrest may unveil the mystery of Madam Rose Valley stumbled upon in 2016 after the demonetisation. 

The suspected scheme of routing money from one company to another will reveal the nexus between entry operators – or jama kharchi companies – and a section of officials. Agarwal was arrested for assisting Neeraj Singh park money got from dubious means.  

Agarwal’s role, being probed by the Enforcement Directorate (ED), may lead investigators to many unanswered questions in the Rose Valley chit fund scam. CBI is probing the Rose Valley case. The links were revealed during a cash haul of demonetized funds in December, 2016. The cash was to be deposited at Agarwal’s office. When the cops started searching the office they found two folders – Rose Valley and Madam Rose Valley. Madam Rose Valley had details of several crores being transferred to a specific person.

Agarwal’s name surfaced for the second time when police registered a case against former Income Tax Additional Director Neeraj Singh in April 2017. Police alleged that Agarwal was the front man of Singh; helped him transfer money obtained through illegal gratification. Singh says he knew Agarwal through his father; not spoken to him for years. Says he knew Agarwal’s connection with the Rose Valley Group after the case started. Since Agarwal had a number of clients, he never shared the details with Singh.    

When ED started probing the Singh-Agarwal nexus they found that Sing took Agarwal’s help to route money through a web of companies and bought property. They also attached a property in Mumbai worth Rs. 3.20 cr in July. Singh claimed that the property was never owned by him or his wife.

Kolkata Police has not specified the quantum of fraud although Agarwal has been charged with cheating.   


Tuesday, November 24, 2020

Kolkata Police arrest middleman Govind Agarwal

In a massive breakthrough, the Kolkata Police on Sunday arrested dubious accountant Govind Agarwal in a case related to setting up hundreds of shell companies to launder the alleged "ill-gotten" wealth of multiple senior revenue officials (both current and retired), based on long-running investigations against Agarwal by multiple central agencies.

Interestingly, Agarwal had been accused by the Central Bureau of Investigation in the Rose Valley Chit Fund case and by the Enforcement Directorate in a money-laundering case related to controversial IRS officer Neeraj Singh.

Significantly, the Kolkata Police have arrested Agarwal in the 2017 case where Singh has also been named as an accused. Based on seizures from raids at premises used by Agarwal in Kolkata, the police had recovered hordes of sensitive and confidential documents belonging to the Income Tax Department, CBI, Financial Intelligence Unit, Directorate of Revenue Intelligence and others, leading to questions of how a low-profile accounts manager had access to such documents.

Sources aware of the investigations against Agarwal told Millennium Post that once central agencies had taken over the Kolkata Police FIR and examined Agarwal multiple times and raided multiple locations in connection with the money-laundering case, a large part of the findings was shared with the city police, who then took the probe forward.

The Kolkata Police was then made aware that Agarwal was handling the finances of at least 10 senior central agency officials, which included a former Chief Vigilance Commissioner, a former member (Investigation) CBDT, an Ex-DG (Investigation) posted in Kolkata and at least five other Commissioners/Chief Commissioners of Income Tax.

Furthermore, before Agarwal's arrest, the Kolkata Police had also raided premises of three chartered accountants namely Santosh Chaudhury, Pradeep Agarwal and Naresh Agarwal, based on which sources say police believe the racket could go into the hundreds of crores, involving alleged kickbacks received by the government officials.

Agarwal — a 12th fail — had such clout in bureaucratic circles that he had entered restricted sections of the Netaji Subhas Chandra Bose International Airport more than 100 times using a daily permit issued by the Air Intelligence Unit of the I-T Department under his name.

Agarwal's job in the racket was simple — if tax officials conducted raids or started any serious investigation, the accountant would broker a deal to settle the case and accept kickbacks on behalf of the concerned public official, which he would then launder through his web of paper companies. One senior official said such payments to the civil servants were part of the racket and were laundered with extreme care to avoid detection, with complex layers of structuring that veiled the money-trail.

Officials with direct knowledge of the matter said several private entities that were under the scanner of probe agencies would pool their resources, earmarked for pay-offs in a host of shell companies — run and operated by the likes of Agarwal. The accountant would then bounce the money across the paper concerns through fictitious transactions to finally reach the end benefactors — in this case, senior revenue officials.

The ED has already attached assets worth Rs 3.88 crore belonging to a now-suspended Neeraj Singh and alleged that these were part of kickbacks received by him from HM Diwan Jewellers through Agarwal. HM Diwan was also raided by central agencies.

According to the initial probe by the Kolkata Police's Anti Fraud Section, which set the ball rolling, seizures from Agarwal's "official" premises in North Kolkata had shown he was operating at least 98 shell companies with rubber stamps and other documents recovered. In fact, further probe by Millennium Post had found many companies registered to Agarwal or linked to him had the same address - the same room, on the same floor, of the same building. When asked about these companies, some of which include Lilac Suppliers, Tobu Engineering and Essencia Beverages, security guards in the building told investigators from the I-T department that they knew of no such companies operating from the building.

What is interesting is that the investigation involving these senior revenue officials, Agarwal, Neeraj Singh and others, is to a large extent, being conducted by central probe agencies who later shared the evidence with local police here, following which the probe was carried ahead by the Kolkata Police. 

 

Saturday, November 21, 2020

Aparna Sen 's moving tribute to the all time great actor Soumitra Chatterjee

SOUMITRA

He has gone. Irrevocably. 

It has only just begun to sink in. For the last forty days of his life, even an aethist like me had secretly been praying for a miracle. I had been tight lipped about him during that entire time, refusing to write or say anything to any journalist for fear of being a harbinger of the inevitable. Unreasonable? Superstitious? Perhaps. I would quietly call his daughter every two or three days to inquire after his health. But now there is no getting away from it. He has left us.

What I cannot fathom is the depth of despair I feel with his passing, my sense of loss, of nothing ever being the same again. It is akin to what I felt when Ray passed away in 1992 or when my parents left us...Ma in 2010, and Baba a year later, or Mrinal Sen a few years ago, and Nabanita Debsen soon after...

But this time there is a difference. There seems to be almost no one left of the world that I once knew...a world made up of certain sensibilities, certain value systems both cultural and moral, the idea of a different (less mediocre?) Bengal, of a different (less reactionary?) India that is vanishing slowly, but surely, with the passing of these people. Their childlike, even foolish, disregard of money and material things; their genuine indifference to brands and luxury items; the positivism with which they embraced fresh new ideas; their faith in humanity despite all that human beings around them were doing to destroy that faith; the remnants, if you like, of what was known as the Bengal Renaissance. Soumitra's holistic approach to life, his many artistic pursuits like writing poetry, sketching, painting, co-editing the prestigious literary magazine 'Ekkhon', writing and directing plays while continuing to act in many mainstream films (plus a few worthwhile ones for which he didn't get paid more often than not!) was, I like to think, a part of being the last few of the Renaissance men and women.

We did not meet often. Not socially. Not unless we were in a film together or doing a joint recitation or event. But I knew he was there. I knew that I could always dial his number and hear his voice at the other end. I knew that I could always rely on him to rise to the occasion with his intrinsic humanism to protest against atrocities that were taking place in the country. Yes, he was very much one of the infamous 49 who had written that open letter to the prime minister against lynching. He had agreed without a second thought while so many other much younger people had held back for reasons beyond my understanding. Fear? Too much at stake? Who knows? Why judge?

I just realised that I have known Soumitra forever. I was only 14 when I met him. Was it the summer of 1960 or earlier in the year? I can't remember exactly, but the details of that first meeting are startlingly clear still. I was sitting alone in the huge river-facing verandah of the old palatial mansion in Neemtita village where the unit had been put up. Hearing the creaking sound of wheels, I looked up from my book and down through the grilled bannister. Some distance away, a bullock cart was approaching down the earthen road. On it, under a shade of woven straw, sat Apu! I was in class VIII then. All the girls in our class were in love with him after seeing 'Apur Sansar' and I was no exeption. And there, right below, was Apu himself! He was looking around curiously. As soon as he saw me, I ducked. I was at that awkward early-teen stage when girls like to feel invisible. Later that evening, we were formally introduced while I tried desperately to become more invisible still. He was so strikingly beautiful! Like a young demi god! He was also newly married and couldn't stop talking about his bride Deepa. All evening, while other unit members sat playing cards or carrom in the great hall that had become our after-pack-up common room, he sat in a corner writing letters to his wife. My mother would tease him about it and soon he and she became good friends. He started calling her 'Boudi' (Bhaabi/sister in-law). As for me, being the youngest in the unit, I used to call everyone 'kaka' (uncle)... Manik-kaka (Satyajit Ray) or Bansi-kaka (Ray's Art Director Bansi Chandragupta), and so on. To my great disppointment Soumitra styled himself 'kaka' as well! I would have called him anything but that, but was too tongue-tied to protest.

So Soumitra-kaka he became, and remained that way even after we started getting paired romantically in mainstream films. He and his wife had become friends of my parents initially, and visited our home in Palm Avenue quite frequently for 'adda'-s. They would be there for Holi celebrations along with much older friends of my parents like the poet Subhash Mukhopadhyay and ad filmmaker Shanti Chaudhury. Soumitra would recite poems or sing Rabindrasangeet lustily while his wife Deepa glowed with pride. In those days, I was dismissed as a youngster or teased rather mercilessly about my budding romances.

Later, after I started going to college, got married, and generally got older, Soumitra and I began to act more and more regularly as a romantic pair. The 'kaka' was dropped - at his request according to me; at my request according to him - and I switched straight to addressing him by his first name. When he protested that I should call him 'dada' at least, I retorted, much more confident now, that no one could turn from a 'kaka' into a 'dada!' So that was that. Interestingly, I have never addressed any of my leading men as 'dada' even though many were much older. Uttam Kumar, old enough to be my father, was always Uttam Babu. And Soumitra Chatterjee remained, until that fateful afternoon of 15th November 2020, simply 'Soumitra.' 

Gradually we became what is known in Bengali as a 'juti' - much like the Hindi word 'jodi'. Suchitra Sen and Uttam Kumar were the legendary 'juti' of Tollygunge. Soumitra and I came a not-too-close second. Neither of us was much bothered by that though. I think we preferred to be actors rather than stars. We were both very zealous about our independence and our mobility and didn't wish to hide behind dark glasses the whole time. Soumitra frequented the College Street Coffee House (our favourite haunt during our college days) even after he became a very big star. He would sit there with his intellectual friends, many well-known poets and authors among them. They would drink endless cups of coffee and discuss everything under the sun from poetry to football, politics to painting. People got so used to seeing him there that they stopped staring after a point.

I liked that about him. I liked his sensible, no-nonsense approach to everything. Life was too short and too precious to waste on being a 'star!' In fact, without either of us quite realising it, he had become a mentor of sorts for me. I was deeply impressed and inspired by his ability to keep his head above water and not sink into the kind of morass that long involvement with the formula fare of mainstream cinema often leads to. He was not simply a film actor; he was so much more! And he read. While most of the others just gossiped between shots, Soumitra read books. In fact, one of our great pleasures was to discuss the books we had just read. Also, he carried a large, red, cloth-bound note book with him at all times. In this he would jot down lines of poetry, points about the characters he was playing, or sketch costume and set designs of some upcoming play while continuing to chat and laugh with us, as we waited to be called for the next shot. Among his many qualities was a highly developed sense of humour. That is one of the things that I will miss for a long time. His presence while alive was so strong, that in death his absence will be too!

There was so much he taught me in passing. "Never let machines come in the way of your acting," he told me once, "The camera, the lights, the michrophones are all your friends, not your enemies! One half of your brain must be aware of them at all times. You must let the mikes catch your voice, take the lights as instructed, and present the required angle of your face to the camera. The other half must forget all about them and emote spontaneously." I am sure I would have got there by and by. Most actors do. But having it pointed out so succintly at that early stage helped. He also showed me the importance of footwork for an actor. That is not as complicated as it sounds. After the director has choregraphed or 'blocked' a scene, the actor must take the various positions required of her effortlessly, without appearing to be looking out for them. That can only happen if she knows when, where and how to manouvre her feet during a shot. This lesson has stood me in very good stead as a director too. Having mastered it myself, I can immediately tell when and why an actor is having a problem with his position and can demonstrate how to do it. This is purely technical stuff of course, and has nothing to do with emoting. But once such basics are out of the way, emoting becomes that much easier.

Even though he acted in more films than he cared to count, Soumitra's first love was the theatre. I saw his maiden production 'Naam Jibon' and was struck by its emotional depth. Without being overly intellectual, it was realistic and compassionate in the best traditions of Ibsen or Chekhov. Yet it was a commercial production, not group theatre. He had married art with commerce quite brilliantly. Years later, I would see Soumitra playing King Lear in Suman Mukherjee's play 'Raja Lear' and be deeply moved by his understanding of that iconic Shakespearean character. Seeing the old king in a wheelchair reminded me of my father in the last years of his life and reduced me to tears!

After I started directing films myself, I practically stopped acting. Soumitra acted in two of my films. 'Paromitar Ek Din' and '15 Park Avenue.' He was a director's delight and put an end to all my trepidations about directing such a legend on the very first day . I feel that his performance in Paromitar Ek Din as a romantic, but failed lover remains one of his best to this day. And yet, he said to me jestingly, but with a hint of wistfulness in his voice, " Now that you've started directing, I'm in a soup! Our 'juti' is broken!" Except that it wasn't. Not really. At 80 plus, his box-office draw was such that roles were written especially for him! And sometimes I would be cast in those as his wife or lover. Two such films were Suman Ghosh's 'Basu Paribar' (an adaptation of James Joyce's 'The Dead') and Anumita Dasgupta's 'Bohomaan.' These were made in the final years of his life. His doctors didn't allow him to work for more than four hours a day, but we still managed to complete and release the films in time. And audiences flocked to see them! Soumitra's talent, we all know, was recognised both at home and abroad. He was awarded the Padmabhushan, won National Awards, and received France's highest award - the Legion of Honour like his mentor Satyajit Ray before him. But all this was like water off a duck's back, failing to affect him. He remained the quinessential Bengali intellectual without the slightest trace of arrogance in him.

There will be no more films from our 'juti' now...no more discussions about literature, politics and poetry. All that we are left with are memories...memories that must be cherished and celebrated, just as his life must be celebrated even as we mourn his passing.

Wednesday, November 18, 2020

Amazon can own Future Retail Ltd. only by violating India’s laws

Amazon can own Future Retail Ltd. (FRL) only by violating India’s laws. As it blocks Reliance’s takeover, it finds itself in legal jeopardy by securing indirect hold in FRL.

Future Group has the right to sell its assets to whom it wants. If Amazon has indirect control over FRL, it has breached India’s FDI rules.

It has bypassed mandatory government approvals and is now open to action by ED and SEBI.

By not disclosing its attempt to obtain control over FRL, it has violated FDI rules and mandatory SEBI regulations requiring it to make an open offer to FRL shareholders.

FDI in multi-brand retail (MBR) is allowed with stringent conditions like using 50 percent of the investment for back-end infrastructure, mandatory local sourcing of goods and services, etc. Most important, government permission is a mandatory requirement for such investment.

Thus, Amazon avoided Indian regulations. First, there was an agreement between listed FRL (where FDI would not have been possible) and Future Coupons Ltd. (FCL) (where FDI is allowed) that gave the latter effective veto power over the former.

In step two, Amazon invested Rs 1,430 cr for a 49 percent stake in FCL which owned a 9.82 per cent stake in FRL), giving itself effective veto power over FCL. Thus, Amazon obtained veto powers and control over a MBR company where FDI is not permitted without government approval.

On August 12, 2019, FRL entered into a shareholders’ agreement with the KB Group (Future Group founder Kishore Biyani, family members, private limited companies controlled by him) and FCL. This provided special rights to FCL, which held convertible warrants in FRL. Crucially, it said that retail assets of FRL could not be licensed, transferred or alienated without the approval of FCL. In particular, it gave FCL a veto over sale of FRL’s assets to competitors, notably Reliance.

FCL, having obtained this veto over FRL, entered into a shareholders agreement with Amazon and KB Group. Here, it was agreed that Biyani and his firms would be required to vote in the same manner as Amazon in matters concerning the sale of retail assets and sale of assets to restricted persons (read Reliance Retail). The agreement also said that Biyani and his nominated directors could not even place a proposal on these issues in front of the FRL board; further the FRL board also cannot even consider proposals on these issues without Amazon’s consent.

In effect, with a tiny indirect stake in FRL and no board position in the listed retail company, Amazon gained indirect control over the pioneer in organized retail.

The amendments made to the articles of association of FCL do not reflect the fact that Amazon had gained control. Moreover, the articles of association of FRL have never been amended.

Had the disclosure of these actions been made, the Enforcement Directorate would have been forced to step in. The term control in the Foreign Exchange Management Act (non-debt instrument) Rules clearly covers control rights taken through shareholder agreements. FDI laws in India allow FCL to hold shares of FRL only as long as FCL is owned and controlled by Indian residents.

Similarly, SEBI would have required Amazon to make an open offer to acquire 26 percent of FRL from shareholders at an approximate price of Rs. 550-600 per share.

That has not happened. Instead, Amazon used a transaction with FCL to stall a scheme of arrangement (the merger of group firms and sale of assets to Reliance Retail for Rs 25000 cr) which has been considered by the Board of FRL to be in the interest of all stakeholders. Reliance agreed to acquire the assets of Future in a slump sale in August this year.

Not only did Amazon get an emergency arbitration award in Singapore, it also wrote to SEBI and other authorities to delay the deal. This prompted FRL to file a suit in Delhi High Court asking for issuance of directions barring Amazon from interfering with its contract with Reliance.

Rights being asserted are way beyond shareholders rights. They say they will decide with whom FRL can and cannot do business. Amazon has no voting rights or Board position but says that you dare not take a decision without me on saving yourself.

In any case, Amazon’s shareholder agreement with FCL categorically claims that its investment is not in FRL and it does not seek to assume any control over FRL. Either this is true or this is subterfuge to deceive the regulators.

Future group was racking up losses even before the pandemic struck. It defaulted on payment of Rs 10,000 cr. It owes banks and financial institutions Rs 18,000 cr and Rs 7500 cr to vendors and suppliers. The deal with Reliance would have helped all stakeholders and prevented a painful bankruptcy.

Future is going through an adverse financial situation. It is not able to pay its vendors and is facing a lot of problems primarily with working capital. It is strapped of cash. So if Reliance takes over Future, it will also take over their liabilities. It is not just good for Future but also for the lenders. In addition what Reliance is going to do is to invest in Future Enterprise Ltd which is going to scale up the brand.

As a listed company, FRL’s rights to reorganize itself cannot be stalled by anyone, including the promoters, if it has the approval of the requisite majority of shareholders and creditors.

Amazon has claimed that it had arranged a rescue deal for Future group. But the bottom line is that Amazon cannot invest directly in and rescue FRL from bankruptcy under current FDI laws. By trying to impose conditions on FRL such as issuing a list of restricted persons is just a means of stifling competition.

Restricted persons is not minority rights. It is anti-competition rights.

If it won’t get ownership of FRL, Amazon is trying to scuttle competition from owning the same company.

Chanda Kochhar says she had not sanctioned any Videocon loan independently

The former MD and CEO of ICICI Bank has said that two of the six loans given to Videocon group — currently under the Enforcement Directorate (ED) investigation for alleged corruption — were approved before her appointment at the top post.

Further, she mentioned that she was just one of 31 top executives who were part of credit approval committees that sanctioned high-value loans to the beleaguered group from 2009 to 2018.

In a statement before the ED adjudicating authority, the troubled banker defended allegations of ‘quid pro quo’ over loans approved by the bank when she was the head of ICICI Bank, mentioning that the loans were standard performing assets till early 2017.

During the entire period of association with Videocon Group, ICICI Bank has earned a high amount of fee and interest till 2016. The loans were standard performing assets till early 2017, which is when the entire exposure of the entire banking system to Videocon was declared NPA.

In September 2020 ED had arrested Deepak Kochhar, husband of Chanda Kochhar, in connection with ICICI Bank-Videocon money laundering case, and it was the first arrest since the case was registered in February 2019. In October 2018, Chanda Kochhar had quit the bank after being mired in allegations that she favoured Videocon Group.

Asserting that the loans were approved as part of the bank’s ordinary course of business, she explained the roles of six senior bankers named in the FIR.

She said that the FIR also contains the names of other senior personnel who participated in the committees that sanctioned the said six loans. These senior people are no pushovers and hence the committees would have rejected and not recommended the proposal if it was not as per merits.

Last week, the adjudicating authority said that probing agencies had failed to quiz these senior officials. The order came while dismissing the ED’s plea seeking attachment of the assets of Kochchar and her arrested husband Deepak Kochhar—worth Rs 78.15 crore—seized by it in January.

Adjudicating Authority concluded in its order that the senior officials – Sandeep Bakshi, K Ramkumar, Sonjoy Chatterjee, N S Kannan, Zarin Daruwala, Rajiv Sabharwal, K V Kamath and Homi Khusrokhan – though known and identified, were neither interrogated for the alleged scheduled offences by CBI nor interrogation, if any, revealed by the CBI or the ED.

The adjudicating authority also found Kochhar’s argument valid that a rupee term loan of Rs 300 crore had not turned into a bad loan. The investigating agencies examining allegations of quid pro quo and money laundering primarily focussed on this loan.

She said she had no involvement in the origination, processing, or the detailed due diligence carried out by various departments of these loans. She had not approved any of these loans independently. Even as the MD & CEO she did not have any veto power in any committee.

Batting sensation Smriti Mandhana is now brand ambassador of Equitas Small Finance Bank

She scored 4 centuries in 51 ODIs. Equitas is working on a campaign to portray strength, capability and aspirations of women.

With her as the brand ambassador, India's first small finance bank is set to bring women together. Through powerful conversations on shared experiences resulting in growth and prosperity. She will appear across all media platforms shortly.

Smriti is an embodiment of aspirations for Indian women across all ages and walks of life. Equitas sees her as the face of success, growth and prosperity with a proven track record of reigning career in cricket.

Smriti Mandhana scored 2025 ODI runs with an average of 43.1 and played 75 T20 internationals and 2 test matches since her debut in 2013.

She received the Arjuna Award in 2019.

“I am really glad to be an instrumental part of Equitas Small Finance Bank’s motive of promoting financial empowerment to all sections of society. It is a great privilege to be associated with the brand’s positioning as a socially responsible bank,” she said.

The small finance bank has over Rs 15500 cr of loan assets with Rs 11500 cr of deposits at the end of June.