March 21, 2018

Is Finance Secretary Hasmukh Adhia shielding PNB scamsters Nirav Modi and Mehul Choksi?

In the PNBScam of Nirav Modi and Mehul Choksi, Adhia faces more questions about his conduct

By Team PGurus -

 

March 21, 2018

    

In the PNBScam of Nirav Modi and Mehul Choksi, Adhia faces more questions about his conduct

First as the Secretary Banking and Financial Services, then as the Revenue Secretary and now as the Finance Secretary, Hasmukh Adhia from Gujarat cadre is the most powerful officer in the Finance Ministry. Owing to his proximity to the Prime Minister and the Finance Minister, he was the only bureaucrat outside the PMO and Economic Affairs Department, according to media reports, who was part of the team working on demonetization. Dr. Hasmukh Adhia, a Ph. D. in Yoga has an iron grip over the Department he heads, is known for ruthless micromanagement and has no friends in the team that he heads in the Finance Ministry. Antagonism, indifference, and brazenness have been the definitive ideas that have shaped his tenure.

Was it a deliberate ploy to notinvoke the Black Money and Benami prohibition legislations against the Nirav Modi group? Was there a design in place to ensure that there was no way in which a look-out-circular could be issued against Mehul Choksi and Nirav Modi?

If there is one issue that ties the entire journey of Hasmukh Adhia in the Finance Ministry like a string of pearls, it is – Nirav Modi.

In the Punjab National Bank (PNB) Scam, it is now clear that 21,666 Letters of Undertaking (LoU) were issued after 26.05.2014. It is significant to mention that 1,070, 6189, 6669, 5878 LoUs were issued in 2018, 2017, 2016 and 2015 respectively[1]. All through this period, Adhia was in the Finance Ministry in very critical assignments.

Fig 1. LoUs issued by PNB during NDA

Adhia joined the Department of Banking and Financial Services in the Ministry of Finance in November 2014 and was moved to the Department of Revenue in August 2015. As someone who is known to be a control freak and subjects all entities in his department to microscopic scrutiny, it appears strange, rather intriguing, as to why Adhia did not check this unbridled disaster, right under his watch.

It is an evident fact that close to 7000 Letters of Undertaking (LoUs) were issued in the PNB scam during the tenure of Adhia as Financial Services Secretary. By the time he left for Revenue, the road was set for the smooth sailing of Nirav Modi and his uncle & Gitanjali Gems owner Mehul Choksi. The inevitable happened next.

Why hide the Income Tax Raid details of Jan 2017?

A senior official of Income-tax, on strict condition of anonymity, has provided PGurus, incriminatingdocuments pertaining to the search and investigations being conducted against the Nirav Modi group by the Income Tax Department.  On January 13, 2017, authorization was provided to search the premises/ assessees pertaining to the Nirav Modi group and the said authorization was executed on January 14, 2017. In total, 17 places were searched, out of which 15 pertain to Mumbai and one each in Delhi and Jaipur. The firms include Firestar Diamond, Firestar trading, Firestar International, Gitanjali Gems, Gitanjali Exports, Gitanjali Jewellery Retail, Gitanjali Brands etc.,

PGurus is presently withholding publication of the documents pertaining to search/ investigation for verification of the authenticity. We will – however – analyze in detail this issue.

First and foremost, as the evidence unearthed by the Income Tax department appear to be sound and legally strong, why did they not share the details with the Central Bureau of Investigation (CBI) or Enforcement Directorate (ED) or Financial Intelligence Unit (FIU)? Adhia is known to hold regular review meetings and the Income Tax department conducts no major search without the approval of the Revenue Secretary. That being the case, why was there such a major lapse? Is there an ulterior design? What is even more shocking is that, even after the scam tumbled out following the media coverage, the Income Tax Department has strictly guarded the evidence and has not provided all the documents to CBI, ED, and FIU, according to a whistleblower Income Tax officer. Is this a telling case of the integrity or absolute incompetence of Hasmukh Adhia? Being a well-known officer to Prime Minister Narendra Modi from his Gujarat days, did Adhia backstab Prime Minister’s declared fight against corruption?

Secondly, according to the whistleblower officer, there is no progress in the investigations made in the Nirav Modi case by Income Tax, even after 15 months. The Black Money Act and Benami Transactions (Prohibition) Act were never invoked in this case, all through 2017. According to insiders, Mehul Choksi and Nirav Modi were allowed to sell property after property, while the tax officials looked the other way. According to our whistleblower, there were strict instructions from the top to not proceed further against Nirav Modi. Did Adhia give any instructions to this effect? Did he keep the Finance Minister Arun Jaitley in the loop or make the decisions on his own? If these legislations were invoked, then a Look-out-circular would have been issued against both Nirav Modi and Mehul Choksi and their fleeing from India would have been next to impossible. Nirav Modi and tax evasion are not different stories. The Directorate of Revenue Intelligence (DRI), another agency under Adhia had seized jewelry to the tune of Rs.1000 crores ($160 million) from the firms of Nirav Modi. However, no prosecution was launched till the scam broke and Modi flew away from India. Why, Mr. Adhia? Is every agency in your Ministry absolutely incompetent or are you rewarding this kind of behavior, that there is a serious pattern emerging?

Thirdly, The Wire website recently carried a story on gold bars being deposited in the Toshakhana which were allegedly gifted by Nirav Modi to Adhia during the Diwali of 2016[2].

Adhia admitted to the website that he got gold bars. But he cleverly said he don’t know who was the gift supplier. Mr. Adhia, who are you fooling? As a Government servant, you should have alerted the CBI or Delhi Police first and submitting to Toshakhana is totally illegal. Here you are trying to save the person who gifted gold bars.

In a letter to the Prime Minister, BJP leader Subramanian Swamy has alleged that the said gold bars, gifted to a senior Finance Ministry official by Nirav Modi, were deposited in the Toshakhana only because they were mistakenly opened by the servant in front of another IAS officer who had come to wish Diwali. However, Swamy did not name any official who received these doubtful gifts. As strange as it may sound, the Gold bars don’t find any entry in the Toshakhana records and the missing gold bars and the mystery man will come back to haunt Adhia in days to come.

Uday Singh Kumawat, the trusted officer (Joint Secretary in Revenue Department) in the Adhia Administration has been playing mischief in this case too. Did he act as an intermediary in this case for Adhia? Is that the reason Adhia turned a blind eye to Kumawat and his debauchery that PGurus have reported in detail[3]? Was he rewarded for this very purpose by getting Appointments Committee of Cabinet (ACC) retrospectively extend his tenure in the Finance Ministry? Were all these details suppressed from the ACC headed by the Prime Minister?

Was it a deliberate ploy to not invoke the Black Money and Benami prohibition legislations against the Nirav Modi group? Was there a design in place to ensure that there was no way in which a look-out-circular could be issued against Mehul Choksi and Nirav Modi? Was there an escape plan in place that was handed over to Nirav Modi to help him out?

This article poses more questions than answers. Though we are in possession of many documents pertaining to the Nirav Modi case, we are at present verifying the same before we run them here. The one question that begs a reply is – did Hasmukh Adhia let his naked ambition ride roughshod on all principles and ethics on which this Government had promised to fight corruption?

Adhia is known to be a stickler for vigilance issues and in most cases, he has taken very harshdecisions that were never heard of in the Ministry. PGurus is glad to hold the mirror to Adhia and request that he practice the standards he wants to preach. Adhia needs to answer now and we will continue to ask the important questions. He must reply as to why he withheld the Income Tax raid findings of January 2017 at Nirav Modi and uncle Mehul Choksi firms?

Truth has an uncanny way of manifesting itself and we will continue our quest for the truth.

References:

[1] IT is still hushing up the probe against Chidambaram family under Black Money and Benami Acts – Mar 20, 2018, PGurus.com

[2] Exclusive: Finance Secretary Received Gold Biscuits as Gift for Diwali But Failed to Order Probe– Mar 13, 2018, TheWire.com

[3] More muck and sleaze tumbles out from the cupboards of the Finance Ministry – Mar 18, 2018, PGurus.com

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