ED hits ailing Air India with cases of money laundering
22 October 2018
The Enforcement Directorate (ED) has registered various criminal cases of money laundering in at least four deals involving national flag carrier Air India, including the controversial merger of Air India and Indian Airlines, bringing fresh trouble to the embattled state-run carrier.
The ED has initiated a probe into allegations of irregularities and money laundering that had caused losses of tens of thousands of crore of rupees to the exchequer.
While registering the cases, the CBI had last year said that these instances "relate to decisions taken by the ministry during the UPA government’s tenure, which caused losses of tens of thousands of crore of rupees to the exchequer."
The agency has filed at least four Enforcement Case Information Reports (ECIRs), the ED equivalent of a police FIR, into various deals signed during the UPA rule.
The allegations relate to purchase of 111 aircraft, costing about Rs 70,000 crore, for national airlines to benefit foreign aircraft manufacturers.
The CAG had in 2011 questioned the rationale behind the government's decision to order 111 airplanes - 48 from Airbus and 68 from Boeing - for AI and Indian Airlines for about Rs 70,000 crore in 2006.
Calling the decision a "recipe for disaster", the CAG had said it should have raised "alarm" in the ministry of civil aviation, Public Investment Board and the Planning Commission.
"Such a purchase caused an alleged financial loss to the already stressed national carriers," the CBI had alleged.
The other case pertains to leasing of a large number of aircraft without due consideration, proper route study and marketing or price strategy, the CBI had said.
Another case involves allegations of surrender of profitable routes and timings of Air India to favour national and international private players, which allegedly caused a "huge" loss to the state-run carrier.
CBI had also filed a case against unknown officials of Air India, German firm SAP AG and global computer major IBM in connection with alleged irregularities in procurement of software worth Rs225 crore by the national carrier in 2011.
This case was filed by the CBI on the recommendation of the Central Vigilance Commission (CVC) which found prima facie procedural irregularities took place in the procurement of the software.
The ECIRs have been registered under the Prevention of Money Laundering Act. The ED is also reported to have obtained relevant documents from the airlines and other departments in connection with the cases.
While the cases that are based on FIRs file by the CBI are seen in political circles as "politically motivated,” reports quoting agency sources said the probe will be on a specific angle to ascertain if the alleged irregularities led to the generation of black money and if it was laundered to create illegal assets by the accused.
Two of the cases are related to the controversial merger of Air India and Indian Airlines and alleged irregularities in purchase and leasing of aircraft by the two state-run carriers under the UPA government, which caused "huge" losses to the exchequer, according to the CBI FIRs.
The other two cases relate to surrender of profitable routes and timings of Air India to favour national and international private players, which allegedly caused a "huge" loss to the state-run carrier and the other related to alleged wrongdoing in the purchase of software for the airline.
The CBI had registered cases against unidentified officials of Air India and the ministry of civil aviation and some others on charges of criminal conspiracy, cheating and corruption.
The ED is expected to summon a few officials and others involved in the dealings.