CBI chief Sinha warns of laundered black money re-entering India

19 August 2014

Central Bureau of Investigation director Ranjit SinhaCentral Bureau of Investigation director Ranjit Sinha, in his second major intervention with the finance ministry this month, has written to the secretaries of the ministry's revenue and banking departments to caution that big corporate houses are using front companies abroad to illegally re-route huge sums of money.

The CBI has sent copies of the communication to the special investigation team (SIT) on black money, says a Financial Express report.

Sinha had, on 11 August, written to finance minister Arun Jaitley about ''unfair practices'' in the selection of chairmen and managing directors of public sector banks, including Syndicate Bank, where a bribe-for-loan scandal is under CBI investigation.

The ministry has now taken up the matter with the Reserve Bank of India.

A committee headed by then RBI governor D Subbarao had approved the recommendation on selection of the now tainted S K Jain for the top job at Syndicate Bank.

In separate letters written to Banking Secretary G S Sandhu and Revenue Secretary Shaktikant Das last week, the CBI chief has said that many corporate houses were indulging in ''third party transfers'' in violation of RBI guidelines. Sinha has flagged to Sandhu that banks too have been party to these illegal ''third party transfers'', wherein billing is routed through an intermediary in a third location, which is frequently a tax haven.

In the letter to Das, Sinha has asked that cases under the revenue department involving third party transfers be referred to the CBI.

Sinha's letters follow a preliminary enquiry registered by the CBI against the Adani group, which has been accused of overinvoicing to the tune of Rs600 crore. The Directorate of Revenue Intelligence (DRI) had earlier issued show-cause notices to three Adani companies.

While the CBI director's note does not name any corporate house, Sinha is believed to have informed the two secretaries about a recent case - which he is learnt to have described as ''the tip of the iceberg'' - wherein hundreds of crores of rupees were found to have been similarly re-routed.

The CBI chief has asked the revenue secretary to submit to the agency all data available with agencies such as DRI and Customs, wherein corporate houses have been detected as having routed money using tax havens or front companies.

 search domain-b