JP (Jai Pakash or Jaypee) Associates managing director Sunny Gaur, infrastructure doyen Dilip Suryavanshi, mining Baron Sanjay Pathak and coal trader brothers Satish and Manish Saraogi are billionaires of Madhya Pradesh. They are famous entrepreneurs in their own right. Sanjay Pathak is also a powerful minister in the State cabinet. But they have come to be known better in the State for their controversial association with Chief Minister Shivraj Singh Chouhan. The Chief Minister, who, ironically, loves to wear his ‘humble farmer’ identity on his sleeves, has landed in a number of controversies for allegedly abusing his powers to help his rich friends prosper.
Whenever the Congress mounts attacks on him, the Chief Minister cries foul, saying feudal elements have ganged-up against ‘a humble farmer’, that is him. He has repeated this refrain ad-nauseum during his 11 years of chief ministership.
Chouhan seldom, if ever, sounded more hypocritical than on Makar Sankranti this year. Inaugurating the State-wide ‘Festival of Joy’ to mark recreational activities of the newly formed Department of Happiness in the State, the Chief Minister rather sententiously glorified poverty.
“Jo anand faqiri main hai, woh amiri main kahan!” Chouhan quipped while exhorting people to derive happiness through donating things to the poor and needy. Irony about the sermon was not lost on the State’s people. The irony was that only two days ago the Congress had released a photograph of the Chief Minister posing with two billionaires-Sanjay Pathak and Satish Saraogi. Both are suspected to be involved in a Rs. 500-crore Hawala racket. The Chief Minister is facing allegations of protecting them.
Unlike in the past, the Chief Minister might find the going extremely tough for himself as well as his friends this time round as the Central agency, the Enforcement Directorate (ED), has come in the picture. Given the ED sleuths’ earnestness to unravel the scam, more bad news could be in store for a beleaguered Chouhan.
The Enforcement Directorate has registered a money laundering case under the provisions of the Prevention of Money Laundering Act (PMLA), taking cognisance of four FIRs registered by Madhya Pradesh Police and a recommendation sent in this regard by the State government to the ED headquarters in Delhi earlier.
Under the said hawala racket, fake accounts were allegedly opened in a private bank branch under which scrapped old notes were deposited in Katni district.
Fresh trouble for the Chief Minister began on January 9 when he abruptly transferred Katni Superintendent of Police Gaurav Tiwari to Chhindwara. Tiwari, a 2010 batch Indian Police Service (IPS) officer, was pretty close to exposing involvement of influential people, including mining barons, businessmen and the ruling Bhartiya Janata Party (BJP) leaders in the scam that had been flourishing
picture investigating the `500-crore hawala scam
Congress spokesman KK Mishra claims that barely two days before his unceremonious transfer, the SP had sought permission from his higher-ups in the police headquarters to arrest the Saraogi brothers and State BJP president Nand Kumar Singh Chouhan’s son for their suspected involvement in the hawala rip-off. A Special Investigation Team (SIT) that the SP formed had also extracted confessions from two employees of the Saraogi brothers in the first week of January. They told the SIT about direct complicity of the Minister of State for SMSE and mining baron Sanjay Pathak in the scam.
The police officer’s intention rattled the government. Tiwari was abruptly transferred, though he had barely completed six months as SP Katni, a business hub 400 km east of Bhopal. Fearless and honest, Tiwari had been similarly transferred from his previous posting in Balaghat, where he had exposed the then collector’s collusion with timber mafia.
Before going into details of the hawala controversy, a recapitulation of the two previous rows involving the Chief Minister and his billionaire friends would be in order. That will not only provide useful perspective to the present controversy but also help understand the wanton money culture in the ruling BJP spawned by the Chouhan’s uninterrupted rule as Chief Minister in the last 11 years.
CHOUHAN was barely 13 days into the Chief Minister office when on December 12, 2005, his government allotted prospecting licence of mining to the JP Associates on 470 hectares in Rewa district. The government also allotted to the JP Associates 25 hectares of private land belonging to farmers of the area without their consent. When the farmers protested, the security personnel of the JP Associates fired on them. Shivraj government’s unusual generosity to the JP Associates fuelled massive speculation about his friendship with the company’s managing director Sunny Gaur.
Amid the speculation, five months later, four heavy vehicles (dumpers) worth about Rs. 2 crore were registered in the name of the Chief Minister’s wife, Sadhna Singh. These vehicles were acquired by Sadhna “through JP Associates and for JP Associates.” The documents downloaded from the official website of the MP Transport Department ‘E-Sewa’ by the then Bharatiya Jana Shakti (BJS) leader Prahlad Patel (now BJP Lok Sabha member from Damoh), and others gave the registration numbers of the four vehicles with owner’s name as “Smt Sadhna Singh”; Father’s/Husband’s name as “Shri SR Singh”; and the address as “Jaypee Nagar Plant, Rewa.”
When the matter came to light, Sadhna Singh transferred the four vehicles to JP Associates as shown by registration documents. Interestingly, the guarantee for the purchase of the four vehicles was also given by JP Associates.
THE affidavit that Chouhan had filed before the Sehore Collector (who was the Returning Officer for Budhni Assembly by-election) in April 2006 did not mention that he or his wife was in possession of these vehicles. Nor could Sadhna Singh have been able to purchase the four vehicles with the income disclosed in the affidavit.
It was understood as a case of quid pro quo; the gift of heavy vehicles being presented in lieu of the State government allotment of land to the JP Associates for prospecting.
The then leader of opposition, Jamuna Devi, took the matter to the then Lokayukta, Ripu Sudan Dayal, who refused to act. Ramesh Sahu, a Congress activist, then moved the court of Special Judge, RK Bhave, which directed the Lokayukta organisation to investigate the matter. Prakash Prabhakar Naolekar, who succeeded Dayal as the Lokayukta, turned to be a more eager saviour of the Chief Minister.
Naolekar’s organisation proposed dismissal of the case and special Lokayukta judge willingly did the bidding. The judge, BKS Chouhan, observed “that Shivraj Singh Chouhan should indulge in a business of petty corruption is not prima facie acceptable because he, as the Chief Minister of Madhya Pradesh, could siphon off hundreds of crores of rupees without directly bringing his relatives in the picture”. The case was finally closed in 2011.
Significantly, the dumper case has resurfaced with special Lokayukta court in Rewa scheduling the hearing of a fresh petition filed by Congress leader KK Mishra for February 3, 2017. Mishra says he has more concrete evidence to prove the Chief Minister and his wife’s complicity in the dumper scam. However, the Congress leader’s petition will be admitted only after the court goes through the fresh evidence. KK Mishra is a rare Congress leader who has been doggedly fighting legal battles against the Chief Minister and ministers. In the process, he has three cases of defamation filed against him by the Chief Minister. But Mishra says he is unfazed and would continue to fight against the corruption in the BJP government.
The dumper case had barely faded from public memory when, in 2008, the JP Associates signed four MoUs with the Madhya Pradesh government to invest Rs. 13,000 crore for setting up two cement manufacturing units, an aluminium production factory and a power plant for generating power. Cleary, the scam had not affected the close relations between the Chief Minister and JP Associates managing director Sunny Gaur. In fact, Gaur was one of the delegates who accompanied the Chief Minister during a four-day visit to Singapore in January, 2016.
The Chief Minister landed in another controversy in June 2012 when the income tax sleuths conducted raids at the premises of his school days friend, Dilip Suryavanshi. Unaccounted wealth to the tune of Rs. 1,000 crore was seized during simultaneous raids at the offices and residential premises of Suryavanshi, owner of Dilip Buildcon Ltd.
The I-T raids caused huge embarrassment to the BJP government as Suryavanshi is considered to be close to several party leaders.
His proximity to Chouhan can be gauged from the fact that Suryavanshi was credited with playing a key role in persuading the Chief Minister to marry Sadhna Singh of Gondia in 1991. He is, therefore, considered close to the Chouhan couple. Suryavanshi had also reportedly financed and guided a campaign to get the then Chief Minister Babulal Gaur ousted and Chouhan installed on the post in November 2005.
Son of a retired deputy superintendent of police, the rise of Suryavanshi has been meteoric after the BJP came to power in 2003. The annual turnover of his company had risen from Rs. 13 crore in 2004-05 to Rs. 1,000 crore in 2012. Now the company’ account book boasts over Rs. 10,000 crore worth work orders.
THE Dilip Buildcon is mainly into road construction and has contracts from all over India, mainly in Madhya Pradesh, Jharkhand and Gujarat.
Long queues of beacon light-fitted vehicles outside Dilip Buildcon Ltd’s office and outside his palatial farmhouse on the backwaters of Kerwa Water reservoir, a picturesque picnic spot located on the outskirts of the State capital, are still a common sight. During the income tax raids, the sleuths had seized confidential government files about transfers and postings of bureaucrats, which only the concerned ministers and bureaucrats are supposed to be privy to. Bureaucrats, who are invited to Suryavanshi’s dinners, wear the invite like a badge of honour.
Suryavanshi, a former president of Madhya Pradesh Builders Association, owns about a dozen companies, a college in the name of Swami Vivekananda and a hospital named Shivam in the State capital that is run by Dr Hitesh Bajpai, the state BJP spokesperson.
For Dilip Buildcon, which is preparing to list on the bourses this year, the FY 2016 closed with a topline of Rs. 4,000 crore. Its annual profit after tax was estimated to be Rs. 250 crore in the period, making it one of the largest road building companies in the country.
In 1988, Suryavanshi started Dilip Buildcon by undertaking construction of small residential projects, government buildings and petrol pumps. With small contracts, Dilip Buildcon then forayed into road construction in 2000.
Before the IT raids in 2012, the Chief Minister would show little qualms about flaunting his thick relations with Suryananshi. In a function in 2008, a sentimental Chouhan reminisced how Suryavanshi’s mother would feed him like his own mother when he was studying in a college in Bhopal.
Of late, however, both avoid meeting each other in public. The Chief Minister kept a conspicuously low profile in the grand reception for Suryavanshi’s son Rohan’s marriage on January 21 this year. But, the BJP insiders aver, Chouhan and Suryavanshi continue to enjoy the kind of rapport which Mulayam Singh Yadav as Chief Minister of Uttar Pradesh between 2002 and 2007 had with Amar Singh.
Against the backdrop of the two previous rows, it is easier to understand why the Chief Minister has doggedly protected yet another billionaire and his cabinet colleague.
Sanjay Pathak, who is in the eye of a massive political storm, is not an old friend of the Chief Minister like Gaur or Suravanshi. Pathak, 46, belongs to a traditional Congress family that owned mines and other businesses in Katni district. His father, late Satyendra Pathak, was a minister in Digvijay Singh cabinet. His mother, Nirmala, was the Congress mayor of Katni. Sanjay was elected on Congress ticket to the State Assembly from Vijayaraghavgarh seat twice in 2008 and 2013. He joined the BJP in 2014 after resigning from the Vidhan Sabha and won the by-election from the same seat.
Sanjay’s father owned granite, dolomite and bauxite mines in mineral-rich Katni district. But the business was of medium size. Junior Pathak, through sheer grit and business acumen, expanded the mining and other businesses in the last 15 years. He is flamboyant and generous with money.
HE is the richest MLA in Madhya Pradesh with his declared assets touching Rs. 141 crore. During the 2013 Vidhan Sabha polls, Pathak had declared assets amounting to Rs. 121.32 crore. He presently has his mining business running in 12 countries. He also owns a chain of heritage hotels in National Parks and tourist places of Madhya Pradesh.
While in the Congress, Pathak used to generously fund the party’s activities. His private helicopter would be used liberally by the State Congress leaders for hopping from place to place. It did not, therefore, come as a surprise that the State Congress’s stalwarts such as Digvijay Singh, Kamal Nath, Suresh Pachouri have kept an intriguing silence over the scam involving Pathak. Rajya Sabha member and noted lawyer Vivek Tankha even sought to defend Pathak in a Congress workers’ meeting in Bhopal, much to the shock of partymen.
If the Congress leaders, obliged by the mining baron in the past, are too diffident to criticise him, the Chief Minister’s selective amnesia about his turncoat minister’s sharp diatribe against him and his wife is no less baffling.
An old video clip has gone viral in which Pathak is seen accusing the Chief Minister and his wife of indulging in massive corruption. His tone is sharp and acidic. Chouhan, who is otherwise extremely sensitive about dragging his wife into any controversy, had no qualms in embracing Pathak with both arms.
As his business proliferated and prospects of Narendra Modi becoming Prime Minister brightened, Pathak toyed with the idea of switching sides to safeguard his burgeoning business interests under the possible NDA regime. He sent feelers to the Chief Minister through BJP leaders, notably the then state BJP organising secretary, Arvind Menon. The Chief Minister, with the consent of the party high command, gave the go ahead to the proposal. A ruse for Pathak’s defection to the BJP was cooked up in the form of opposition to Congress’s selection of candidate for Khajuraho parliamentary seat in the 2014 Lok Sabha election. It was a mere political posturing as a prelude to defection because Pathak had no candidate of his choice to forward as an alternative to the official candidate, Raja Pateria.
It was a win-win situation for both Pathak and the BJP. He was looking for a favourable political dispensation to ensure prosperity of his business and the BJP was eyeing his vast resources. The transition went smooth. As per the deal, Pathak not only got elected to the State Assembly on BJP ticket, but was also made a Minister of State a year later.
Once a minister, Pathak’s money talked in the BJP as it did in the Congress. Much to the annoyance of other BJP leaders, he came closer to the Chief Minister. Through Pathak, his business partners-Satish and Manish Saraogi-also cultivated relations with BJP leaders. The relations came into public domain in the wake of the hawala controversy when the Congress alleged that BJP national vice-president Vinay Sahastrabuddhe and State president Nand Kumar Singh Chouhan had camped in a farmhouse of Satish Saraogi in Badwara during the campaigning for Shahdol parliamentary by-election in November last year. Badwara is a town in Katni district which comes under Shahdol parliamentary seat.
Shahdol, a predominantly tribal district, has extensive coal blocks. The Enforcement Directorate’s investigation into the hawala scam has revealed that the Saraogi brothers were involved in supplying subsided coals excavated from these blocks into open market through bogus firms registered with the Madhya Pradesh Small Industries Corporation.
Over 140 fictitious firms have been detected in the documents seized from the houses and offices of the brothers in Katni, which indicate that massive illegal coal marketing took place from 2006 to 2010. Needless to say, the brothers needed political protection from the ruling BJP leaders to carry on illegal business. And, protection did come in many ways as the Chief Minister’s photograph with Pathak and Satish hints.
The Congress released the photograph. The opposition party also alleged that the state BJP president’s son Harsh Singh was Pathak’s business partner in mining and other businesses. Harsh used to reside in a farmhouse at Barhi owned by Pathak. None of the BJP leaders has denied the Congress’s allegations so far.
The BJP leaders had been cosily riding the Saraogis’ and Pathak’s gravy train till Katni’s Superintendent of Police Gaurav Tiwari suddenly put the brake on it.
There were lingering suspicions for quite sometimes that around 100 accounts were opened in banks (particularly the Axis Bank at Katni) since 2009 in the name of bogus firms, below poverty line card holders and other fictitious entities to park black money. However, the police chose to turn a blind eye as the black money parked in them belonged to influential people. Tiwari after joining as Katni SP in July last year, initiated probe into the accounts.
The probe disclosed huge transactions in fictitious accounts, following a complaint from a farmer who claimed that unidentified people made transactions of Rs. 90 lakh from a Jan Dhan saving account opened in his name at an Axis Bank branch in Katni district. Another person complained of cash transactions of Rs. 16 lakh through a savings account opened in his name at the same bank branch.
The complaints had been initially brushed under the carpet. But Tiwari reopened the case.
Katni police registered four criminal cases in the matter and started a probe. Two persons who played key role in opening bogus accounts were identified. However, they went underground before police could arrest them. Three businessmen-Naresh Poddar, Naresh Barman and Manish Saraogi-were found to be behind the suspected money-laundering racket.
While the police probe was in progress, the income tax department on December 23 seized documents relating to several accounts opened at an Axis Bank branch in Katni. The seizure was part of the income tax operation against money-laundering racket across the country in the wake of demonetisation.
THE media quoted a senior income tax officer as saying that “investigations till now have established that the suspected money-laundering racket, involving over 300 businessmen from Madhya Pradesh and outside, is at least worth Rs. 500 crore”. Katni was the hub of the suspected money-laundering racket that benefited businessmen from Indore, Bhopal, Gwalior, Jabalpur, and other parts of the State.
Enthused by the income tax department operations, the SP formed a special investigation team (SIT) to nail the black money hoarders. On January 4, the SIT zeroed in on Saraogi brothers. Police registered a case against them on the complaint of one Rajnish Tiwari. Investigation revealed that the brothers had parked nearly Rs. 100 crore in the accounts of their four employees. Two days later, police arrested Saraogi brothers’ employees, Sandeep Barman and Sanjay Tiwari, who allegedly disclosed that Pathak had also opened fictitious accounts in the name of his employees to park huge sums of money.
Before, the police could quiz Pathak to check veracity of the employees’ statements, the SP was shifted.
The IPS officer quietly accepted the order and proceeded to Hyderabad on training after handing over the charge. No reason was assigned to his transfer.
This was a clear violation of the Supreme Court guidelines on IPS officers transfer. In 2006, allowing a petition by former DGP Prakash Singh, the Supreme Court had directed the Centre and States to set up Police Establishment Boards to decide selection, promotions and transfers of police officers and other staff, till the governments came up with an appropriate legislation.
Following the SC guidelines, the State government formed a Police Transfer Board with the stated objective to insulate field officers’ transfers and postings from political pressure and ensure two-year stint for SPs. The board was flagrantly bypassed by the State government while shifting Tiwari.
The board members declined to comment on the shifting of the “pride of police force”, as Director General of Police RK Shukla described Tiwari.
Off the record, however, they rationalised the decision on the specious grounds that if an officer is moved from one field posting to another, like Tiwari was moved from Katni to Chhindwara, then, as per the SC guidelines, it is not mandatory to explain the reasons for the decision. The reason has to be given only if an officer is taken off field duty, they averred.
Significantly, a day after Tiwari’s transfer was ordered, one of the transfer board’s members and principal secretary, home, Seema Sharma, was transferred to General Administration Department. She was reportedly against Tiwari’s transfer. The DGP too was opposed to the move but yielded only when the government agreed to transfer Tiwari on another field posting instead of attaching him to the police headquarters, sources familiar with the development say.
Tiwari’s transfer created massive storm in Katni where he had become very popular due to his fearless working and direct connect with the citizens. They spontaneously hit the streets to demand revocation of the transfer order. People across class, gender and caste came out in the SP’s support.
THE BJP high command has sought a report on the circumstances leading to the IPS officer’s transfer. Vinay Sahastrabuddhe was asked to prepare the report which will be discussed after the assembly elections in five States, according to party sources.
When protest had erupted in Katni over the SP’s transfer, BJP leaders were busy in the party’s state executive meeting in Sagar. The protest was widely discussed there. The BJP leadership decided to brazen it out by justifying the transfer as a routine administrative exercise.
Pathak, who was also present in the Sagar meeting, clarified his stand to party leaders.
He later told journalists that he was being dragged into the controversy in a pre-panned conspiracy.
Defending Pathak, the Home Minister, Bhupendra Singh, claimed there was no evidence on his involvement into the alleged scam and one could not be blamed on the basis of mere allegations.
The ongoing ED probe into the hawala scam might or might not nail any BJP leader, but a series of developments following the SP’s transfer have exposed moral bankruptcy of the BJP government. Even before the hawala scam surfaced, speculation was rife in the State as to how BJP leaders had turned their black money into white after the demonetisation announcement on November 8. Bhopal’s prominent BJP leader Sushil Waswani’s cooperative bank was raided by the income tax department and abnormal deposits worth several crores post-demonetisation were detected in December last year. Waswani’s wife is the bank’s chairperson and State’s Revenue Minister Umashankar Gupta is its director. State’s women cooperative bank, ‘Swayamsiddha’ in Indore, was also found to have received deposits worth several crores after November 8 in an income tax raid. Its chairperson is Women and Child Welfare Minister Archana Chitnis’s sister-in-law, while she herself is its director.
Rumours also swirled around soon after the demonetisation as to how ministers, BJP MLAs and some bureaucrats employed ingenious ways to settle their huge untaxed cash. Two MLAs from Narsinghpur districts distributed cash among supporters as soft loan with zero per cent interest. Similarly, in other districts too reports abounded as to how the BJP leaders colluded with banks to salvage their black money.
The 13 years of uninterrupted BJP rule in Madhya Pradesh has ensured that its leaders’ can find myriad ways to park their ill-gotten money even as the common man struggles to lay a claim on his own money without hindrance or fear.