ndsharma's blog

Mysterious account and ‘fake’FD

Posted on: September 7, 2010

Apex Bank is once again in focus as the depository of the ill-earned money of those in power in Madhya Pradesh. There is some hope of the skeletons being dug out because of the involvement of the Income Tax (I-T) Department and the Reserve Bank of India (RBI), though chief minister Shivraj Singh Chauhan and his colleagues are desperately trying to keep the matter under wraps.
It started with a tip off to the Income Tax Department that huge amounts were being withdrawn by bearer cheques from the Jabalpur branch of Axis Bank. The story that unfolded following the Income Tax Department raids was that Axis Bank at Jabalpur had opened in January this year an account in the name of “Narmada Vikas Priyojana” to be operated by one “S.S.Siddiqui”. Thereabout the Apex Bank transferred Rs 50 crore to Axis Bank at Jabalpur for Fixed Deposit (FD). Axis Bank issued the “FD certificate “to Apex Bank, kept this amount of Rs 50 crore in suspense account for a couple of days and then transferred it to the account standing in the name of “Narmada Vikas Priyojana”. Around Rs three crore was withdrawn from this account till August, the last withdrawal of Rs 50 lakh having been made on August 14.
This pressed the panic button in the ruling circles. The media persons were told repeatedly that the money of the Apex Bank was safe and it was not responsible for what happened at the Axis Bank. Chairman of Apex Bank Bhanwar Singh Shekhawat issued a statement that he was ordering an inquiry to find out the circumstances in which the Apex Bank had opened an FD account in Axis Bank at Jabalpur. (Can a bureaucrat in Apex Bank transfer Rs 50 crore wherever he likes without the approval and knowledge the Board of Directors and of the chairman?) The chief minister hurriedly entrusted the matter to the Economic Offences Wing (EOW) of the State police, which has become a potent instrument in the hands of the chief minister to shield the faithful and harass the detractors.
Money laundering
Meanwhile, the I-T officials tried in vain to trace “S.S.Siddiqui” because the address he had given did not exist. The Axis Bank executives took days to provide the CCTV footage to the I-T officials and then it was found fudged. An FIR was lodged in a Jabalpur police station. The RBI, too, got interested in the Axis Bank-Apex Bank affair. It was found that the FD certificate for Rs 50 crore that Axis Bank had issued to Apex Bank was “fake”.
It seems to be a massive operation of money laundering. The police have already arrested over nine persons and interrogating some others including a woman employee of the police headquarters in Bhopal. They include the branch manager and deputy manager of Axis Bank in Jabalpur and two of its other employees. The others are intermediaries who have played various roles in the transaction and in whose accounts part of the withdrawn money was deposited.
The I-T Department has now shifted its attention to Apex Bank, particularly to trace, through the revenue software, the source of the Rs 50 crore that was deposited in a forged account in Axis Bank. The I-T officials are said to have already come across nearly 100 “benami” accounts showing transactions of crores of rupees. If the investigation is carried to its logical conclusion (which one doubts) and its outcome is made public, it will be a virtual who’s who of the most corrupt in Madhya Pradesh.
Apex Bank had reached its inglorious heights in the second part of Digvijay Singh’s Congress regime when deputy chief minister Subhash Yadav was its chairman. The importance of Apex Bank can be gauged from the fact that at one stage, Yadav was prepared to give up the post of deputy chief minister to retain the chairmanship of Apex Bank. While present chairman Bhanwar Singh Shekhawat is carrying out the dubious operations through officials of the bank, Subhash Yadav was doing it himself. That would have landed him in a real soup but for the protection provided by Digvijay Singh.
Subhash Yadav was brash also which is a bad qualification for someone playing with public money. He ruffled the feathers of some functionaries of the cooperative federation and they moved in 1998 a petition against Yadav and his cohorts in Apex Bank before the Deputy Registrar of Cooperatives (who has the power of a court in cooperative matters). In his 224-page judgement, the Deputy Registrar of Cooperatives had observed in December 1999: the chairman of the Madhya Pradesh Rajya Sahakari Bank Maryadit (Apex Bank), Subhash Yadav, has no moral right to continue in office as he is involved in corrupt practices and has promoted favouritism and nepotism….. Witnessing his irregular and illegal activities, he should be removed from the cooperative movement as well.
The verdict stated: “Continuance of irregularities, nepotism and favouritism in Apex Bank is a matter of grave concern and no action against the chairman and officials is like killing the very soul of justice. Apex Bank is acting as the Bankers’ Bank in Madhya Pradesh and is the backbone of the cooperative movement besides providing financial assistance to the movement”.
The court said that many important schemes of the government were implemented by it. “Serious irregularities are not only a matter of concern but also create hurdles in the path of the cooperative movement. If action was not taken against the office-bearers and officials of the bank, they would be saved from the certain legal action due against them but it would also result in miscarriage of justice and loss of faith in judiciary”.
When Uma Bharati became chief minister, she went almost with a vengeance against the cooperative dons who were all of them Congress leaders, apparently with a view to severing the lifeline of funds to the Congress party. Vigorous investigations were launched against the more prominent of them. At least one cooperative leader (an Arjun Singh loyalist) was even sentenced to six-year jail term; he was saved from going to jail by Babulal Gaur, who had succeeded Uma Bharati. To oblige Arjun Singh, Gaur had changed the minister of cooperatives so that a favourable affidavit could be submitted in the higher court to help the cooperative leader.
Shivraj Singh Chauhan went a step further. If Congress could use Apex Bank for their own use, why not the BJP? The only thing is that the BJP leaders seem to be going a bit too fast as the hurry in opening an FD account in Axis Bank and then hurriedly withdrawing the money has indicated.


6 Responses to "Mysterious account and ‘fake’FD"

What is the present status of the case…


Same as most of the other scams — total coverup.


Some of this was a bit over my head, but all in all, I enjoyed reading your post.


Thank you for another great post. I’ve a presentation next week, and I’m on the look for such information.


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yeah my dad will like this


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