ED finds intriguing way of masking tainted money in 2G scam

The Enforcement Directorate (ED) has come across an intriguing way of masking tainted money in the 2G spectrum scam, which was layered by several levels to make it appear like regular corporate deals.

The ED on Friday had filed a chargesheet against disgraced former telecom minister A Raja, DMK patriarch M Karunanidhi’s wife M K Dayalu alias Dayalu Ammal, his daughter K Kanimozhi and 16 others, as well as several companies, accusing them of money-laundering.

The ED, in its chargesheet, said it suspects as dubious some future contracts that Kalaignar TV (KTV), accused of receiving Rs 223.55 crore as bribe from Swan Telecom, had signed with at least four companies, such as India Cements Ltd and United Spirits Ltd, to allegedly pay back the bribe amount claimed as a loan.

The ED’s move is likely to generate political heat on the DMK as well as on both India Cements and United Spirits. While India Cements managing director and former BCCI chief N Srinivasan is hitting headlines as he is being investigated in the IPL betting and spot-fixing scandal, United Spirits owner Vijay Mallya is seeing his Kingfisher Airlines face bad financial weather.

Giving precise details, the ED charge sheet says India Cements Ltd had reached an agreement on January 12, 2011, with the DMK-run KTV for advertisements for five years. India Cements had agreed to pay Rs 60 crore, which it did in two installments of Rs 30 crore each. 

While the first installment was released by IDBI Bank, the second was credited into KTV's accounts through HDFC Bank. Both transactions happened through cheques, and on the same day—January 18, 2011.

Later, India Cements deposited another Rs 1.20 crore as it had forgotten to deposit TDS on the sum transferred to KTV.

Similarly, United Spirits too entered into a pact with KTV on January 25 the same year for “distribution network of the brands and products” of the country’s largest liquor manufacturing company for eight years. 

 deal was worth Rs 65 crore. The ED said the company paid Rs 65 crore after deducting tax of Rs 1.30 crore. It had also availed Rs 50 crore short-term corporate working capital from State Bank of Mysore and also from their day-to-day collection.

These were attempts made by KTV to collect cash to allegedly return the bribe amount, explained ED officials. 

The whole exercise as per the cash trail figured out by the ED in its chargesheet had started when Raja had resigned as telecom minister on November 14, 2010, buckling under intense public pressure generated due to the 2G expose. In February the following year, he was arrested by the CBI.Another bid of round-tripping that attracted investigators' attention was Rs 83 crore moved from Saphire Media and Infrastructure Ltd to Anjugam Films Private Ltd to finally end up with KTV, all on December 23, 2010.
 Saphire had allegedly received Rs 60 crore from a Kolkata-based mailbox company and Anjugam was a wholly-owned subsidy of KTV, said ED sources.