TAX SLEUTHS BEGIN HUNT FORCWG LOOT.
BEGINNING the hunt for the alleged loot in Commonwealth Games ( CWG) projects, tax sleuths on Tuesday raided 23 premises and surveyed seven others in the National Capital Region, Chandigarh and Ludhiana.
The raids -- aimed at unearthing corruption in overlay contracts worth ` 630 crore awarded by the organising committee ( OC) -- were carried out on a company linked to BJP member Sudhanshu Mittal and three other consortiums.
Income- tax officials disclosed that the transfer of money using the Mauritius route in certain contracts was also being probed. The investigation includes tax evasion, over- invoicing of goods and services supplied and real or benami ownership of the entities concerned.
Sources in the income- tax department said businessman and politician Mittal's home in New Delhi and the premises of Deepali Designs and Exhibits Pvt Ltd were raided by tax sleuths who arrived early on Tuesday to collect tender agreements and other documents crucial to the probe. Deepali Designs had tied up with Hong Kong-based PICO to successfully bid for an overlay contract worth `230 crore. Tax officials confirmed that Mittal, a close associate of the late BJP leader Pramod Mahajan, and his relatives were stakeholders in PICO-Deepali Designs. Mittal was on the board of directors, said the officials.
Formed by Dinesh Mittal and Rakesh Mittal in 1992, Deepali initially took contracts to provide tents and decorations for marriages and government functions. This explains the company's initial name, Deepali Tents & Decorators. The company later grew and added a sister concern -- Deepali Designs & Exhibits Pvt Ltd -- to bag big-ticket event contracts for outdoor hanger structures and other facilities. It boasts of high-profile clients like Wizcraft International, which too had got a CWG contract.
The sleuths surveyed Gurgaonbased real estate company IREO in which one of the partner is Sudhanshu Mittal's relative Lalit Goel. The tax sleuths suspect that the money earned from Games contracts was rerouted through tax havens into IREO's real estate projects.
IREO released a statement acknowledging that the incometax department had sought information and clarifications from them. IREO did not get any contract for CWG 2010, but the company will fully cooperate with the authorities, like always, the statement read.
Income-tax sleuths also raided three other consortiums, each having foreign partners -- GL Litmus-Meroform, Comfort Net- Nussli India and ESG Arena-DArt furniture. Interestingly, Nussli India was registered in December 2009 and had got contracts for providing tents, porta cabins, containers and other electronic items for six venues. The contract is estimated at `141 crore.
Nussli India had signed a mem orandum of understanding with a Canadian company's wholly owned subsidiary, Minaean Habitat India Pvt Ltd, for supplying modular construction technologies using light-gauge steel at Games venues.
D Art Furniture Systems-ESG Arena of UK had contracts for providing overlays for temporary infrastructure worth `93 crore. And Meroform, who had partnered with French firm GL Services, is said to have bagged a contract worth Rs 165 crore. A senior income-tax official said only the works allotted by the CWG organising committee had been covered. The next round of searches would focus on Games contractors engaged by government departments. Large volumes of documents and tender agreements have been seized and the searches will continue, he said.
The income-tax department had recently gathered informa- tion on the award of contracts for the just-concluded Games from the Organising Committee, the Central Public Works Department (CPWD), Delhi Development Authority (DDA) and New Delhi Municipal Council (NDMC). According to official sources, the government departments were served notice, seeking information under section 131 of the Income Tax Act.
Sources said Parliament's Estimates Committee which probed the CWG scam has prepared an interim report. The panel is likely to have another round of meetings with the stakeholders. Sources said they would summon the BJP-controlled Municipal Corporation of Delhi (MCD) too before finalising the report.
The committee is expected to meet on Thursday. Efforts are on to place the report in Parliament during the winter session, scheduled to begin from November 6. Other than the income-tax department, the Central Bureau of Investigation (CBI), the Enforcement Directorate (ED) and the Comptroller and Auditor General (CAG) are also probing the alleged CWG loot.
It is learnt that the CBI, which has so far got more than 20 complaints, is looking into possible irregularities in the Indian leg of the Queen's Baton Relay. CBI officials have sought documents from the OC. The ED is expected to summon suspended OC officials -- including T.S. Darbari -- in a case registered under the Foreign Exchange Management Act (FEMA) to probe irregularities in payments to overseas companies for a London event on handing over the Queen's baton.
Prime Minister Manmohan Singh has appointed a high-level committee to probe the charges of corruption and other irregularities that cast a shadow over the sporting spectacle. The committee, to be headed by former Comptroller and Auditor General V.K. Shunglu, has been asked to submit its report to the Prime Minister within three months. Earlier, the Central Vigilance Commission (CVC) had indicated financial irregularities in various projects relating to the Games stadiums.
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