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Urea Scam Money Routed To Indian Firms As Foreign Equity

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Ashutosh Kumar Sinha BSCAL
Last Updated : Feb 03 1997 | 12:00 AM IST

During the course of investigations into the NFL-urea scam, the Enforcement Directorate (ED) has unearthed a new modus operandi of hawala operators to bring money into the country - routed in the guise of foreign equity of Indian firms.

Last week, ED sleuths raided the office of an Australian firm, Chemet Systems Ltd, and the residence of its Mumbai-based director Rajiv Shah, in connection with the Rs 133 crore NFL-urea scam.

According to sources in the revenue department, during the course of its investigations, ED sleuths were informed that money allegedly received as kickbacks by the Dubai-based Edible Foodstuff Ltd and later transferred to its promoter Vasudev Paryani, was transferred to a Hyderbad-based company in the form of equity participation of the Australian company. The office of the Hyderabad-based company, Key Quinon Organics India Ltd, and the residences of its working directors, Satish Aggarwal and Anil Aggarwal, have been raided by ED sleuths.

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Shah, in his statement to the ED sleuths, has confirmed that the remittance of over $300,000 had been arranged by the Aggarwals and not by the Australian company. Anil Aggarwal has already been arrested and remanded to judicial custody for two weeks by a court in Hyderabad.

According to a source, The investigation is now closing in on some of the real beneficiaries who have not yet been arrested.

Revenue department officials said that this was a new modus operandi regarding the transfer of hawala money to the country.

Turkey-based Karsan Ltd was to have supplied 200,000 tonnes of urea to the National Fertilisers Limited and the contract for that was signed between the two in 1995. Throwing caution to the wind, NFL paid the entire amount of Rs 133 crore to Karsan as advance. However, despite several assurances, the urea never arrived on the shores of India.

At present, after Interpol had sounded a red alert, two Karsan officials, Cihan Karanci and Tunkay Alankus, have been arrested in Geneva and are in judicial custody. The Indian government is making efforts to have the two deported to face criminal charges in the country.

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First Published: Feb 03 1997 | 12:00 AM IST

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